# Generally Accepted Accounting Principles and Future Value Assignment Words: 384

3-5 ROE Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2. 0. Its sales are \$100 million and it has total assets of \$50 million. What is its ROE? Return on common equity= net income available to common stockholders/common equity 3-6 Du Pont Analysis Donaldson & Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company’s total assets turnover? What is the firm’s equity multiplier? 3-7 Current and Quick Ratios Ace Industries has current assets equal to \$3 million. The company’s current ratio is 1. , and its quick ratio is 1. 0. What is the firm’s level of current liabilities? What is the firm’s level of inventories? Problems (pp. 165-167) 4-1 Future Value of Single Payment If you deposit \$10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? \$10,000*. 10=\$1,000; \$1,000*5 years =\$5,000; \$10,000+\$5,000=\$15,000 4-2 Present Value of Single Payment What is the present value of a security that will pay \$5,000 in 20 years if securities of equal risk pay 7% annually? 4-6 Future Value: ordinary Annuity versus Annuity Due

What is the future value of a 7%, 5-year ordinary annuity that pays \$300 each year? If this were an annuity due, what would its future value be? 4-13 Present Value of an Annuity Find the present value of the following ordinary annuities (see the Notes to Problem 4-12). A. \$400 per year for 10 years at 10% B. \$200 per year for 5 years at 5% C. \$400 per year for 5 years at 0% D. Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due. 4-14 PV Uneven Cash Flow Stream Find the present values of the following cash flow streams.