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1.If $100 is deposited at the end of each year in a savings account that pays 6% interest per year, how much will be in the account at the end of five years? 4. Fill the blank. a. A=( ) b. n= =( ) c. i=( ) 5. what is the F value? a. 563.71 b. 421.24 c. 402.20 d. 133.82
2.State Bank's balance sheet is listed below. Market yields are in parenthesis, and amounts are in millions. 290 Assets Liabilities and Equity Cash $20 Demand deposits $250 Fed funds (1.05%) 150 Savings accounts (1.5%) 20 3-month T-bills (5.25%) 150 MMDAS (2.5%) 2-year T-notes (6.50%) 100 (no minimum balance requirement) 440 8-year T-bonds (7.50%) 2003-month CDs (4.2%) 120 5-year munis (floating rate) 6-month CDs (4.3%) 220 (8.20%, repriced @ 6 months) 50 1-year CDs (4.5%) 375 6-month consumer loans (6%) 250 2-year CDs (5%) 425 1-year consumer loans (5.8%) 300 4-year CDs (5.5%) 330 5-year car loans (7%) 350 5-year CDs (6%) 250 7-month C&I loans (5.8%) 200 Fed funds (1%) 225 2-year C&I loans (floating rate) Overnight repos (1.25%) (5.15%, repriced @ 6-months) 275 6-month commercial paper (3%) 300 15-year variable rate mortgages Subordinate notes: (5.8%, repriced @ 6-months) 200 3-year fixed rate (6.55%) 200 15-year variable rate mortgages Subordinated debt: (6.1%, repriced @ year) 400 7-year fixed rate (7.25%) 100 15-year fixed-rate mortgages (7.85%) 300 Total liabilities $3.545 30-year variable rate mortgages (6.3%, repriced @ quarter) 225 30-year variable rate mortgages (6.4%, repriced @ month) 355 30-year fixed-rate mortgages (8.2%) 400 Premises and equipment 20 Equity 400 Total assets $3.945 Total liabilities and equity $3.945 a. What is the repricing gap if the planning period is 30 days? 6 months? 1 year? 2 years? 5 years? Include demand deposits and savings accounts as RSLs for these calculations. b. What is the impact over the next six months on net interest income if interest rates on RSAs increase 60 basis points and on RSLs increase 40 basis points? c. c. What is the impact over the next year on net interest income if interest rates on RSAS increase 60 basis points and on RSL s increase 40 basis points?
3.A company reports sales revenue of $313 million, cost of goods sold of $183 million, selling and administration expenses of $79 million, depreciation of $20 million and interest expense of $9 million. What is the company's after-tax operating income (to one decimal place) if the corporate tax rate is 30%?
4.What is the return on net operating assets (RNOA), to two decimal places, if the company has an asset turnover of 2.1 and a profit margin of 6.8%?
1.Sol:
4)
A = 100
n = 5 years
i = 6%
5)
To determine future value (F)
F = A x (1 + i)^n -1 / i
F = 100 x (1 + 6%)^5 - 1 / 6%
F = 100 x (1.06)^5 - 1 / 0.06
F = 100 x (1.3382 - 1) / 0.06
F = 100 x (0.3382 / 0.06)
F = 100 x 5.6371
F = $563.71
Therefore F value will be $563.71
Answer is a. $563.71
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3.
1. Sales = $313M
2. Total Expenses:
Cost of Goods Sold = $183M
Selling and administrative Expenses = $79M
Depreciation = $20M
Interest = $ 9M
Total expenses = $291
3. Total Operating profit before Tax = Sales - Total Expenses ($313M-$291M) = $22M
4. Tax Expense = $22M * 30% = $6.6M
5. Total Operating profit after Tax = $22M - $6.6M = $15.4M
