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Michal has just received $5,000
Michal has just received $5,000. He plans to invest this money at 6.5 percent, compounded annually, until he has $50,000. At that time he plans to donate all of this money to Kids-Free foundation. How long from now will it be until he can make this donation?
A.
36.57 years
B.
50 years
C.
37.57 years
Jordan Artificial Foods has total assets of $789,400, long-term debt of $198,375, total equity of $364,182, net fixed assets of $512,100, and costs of goods sold of $121,500. The profit margin is 2.7 percent. What is the current ratio?
A.
1.22
B.
1.40
C.
0.95
Your uncle paid $7,800 for 150 shares in a new company 12 years ago. Every year the price of this company’s shares has appreciated by 14 percent. What is the current value of those 150 shares?
A.
$37,579.66
B.
$40,023.03
C.
$39,580.92
Expert Solution
1)
Future value = Present value * (1 + interest rate)no of periods
$50,000 = $5000 * (1 + 6.5%)no of periods
($50,000 / $5000) = (1 + 6.5%)no of periods
10 = (1 + 6.5%)no of periods
Applying Log on both sides
Log(10) = Log(1 + 6.5%)no of periods
Log(10) = no of periods * Log(1 + 6.5%)
no of periods = Log(1 + 6.5%) / Log(10)
no of periods = 36.5636 years
2)
Current Assets = Total Assets - Net Fixed assets
Current Assets = $789,400 - $512,100
Current Assets = $276,900
Current Liabilities = Total Assets - Long-term debt - Total Equity
Current Liabilities = $789,400 - $198,375 - $364,182
Current Liabilities = $226,843
Current Ratio = Current Assets / Current Liabilities
Current Ratio = $276,900 / $226,843
Current Ratio = 1.22
3)
Current value of those 150 shares = Value of shares 12 years ago * (1 + rate of return)no of periods
Current value of those 150 shares = $7800 * (1 + 14%)12
Current value of those 150 shares = $37,579.66
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