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ASSIGNMENT 1 TABLE OF CONTENT Case: Assessing Martin Manufacturing’s Current Financial Position Question A……………………………………. ………………………………. 1 – 2 Question B…………………………………………………………………….. 3 – 4 Question C………………………………………………………………………………………………… 4
P4-20Time Value–Annuities (Question A, B, C, D & E)………………….. ……………. 5 P4-21Retirement Planning (Question A, B, C & D)…. ………………………………6 P4-27Value of a Mixed Stream (Question A & B)…………………………………… 7 Reference……………………………………………………………………………………… 8 Case: Assessing Martin Manufacturing’s Current Financial Position Question A 1) Current Ratio = Current Asset | | | | | | | | |Current Liability | | | | | | | | | | | | | | | | | |616,000 | | | | | | |Current Liability | | | | | | | | | | | | | | | | 616,000 | |616,000 | | | | | | | | | | | | | |Inventory | | | | | | | | | | | | | |Average Sales Per Day |Annual Sales | | | | | | | | |365 day | | | | |5,075,000 | |13,904. 1 | | | | |Total Assets | | | | | | | | | | | | | | | | Total Asset | | | | | | | | | | | | | | | | | | |3,125,000 | | | | |Interest | | | | | | | | | | |Sales |Sales | | | | | | | | | | | | | |5,075,000 | |5,075,000 | | | | | | | | | | |Sales | | | | | | | | | | | | | | | | | |Total Assets | | | | | | | | | | | | | | | | |Common Stock Equity | | | | | | | | | | | |1,343,750 – 50,000 |1,293,750 | | | | | | | | | | | | |Earnings Per Share | | | | | | | | | | | | | | | | | | |of Common Stock | |Number of Share of Common Stock Outstanding | | | | | | | | |Ratio | | |Book Value Per Share of Common Stock | | | | | | | | | | | | | | | |12. 94| | |A |1 |3 |$900 ? 1. 405 |’ |$1,264. 50 | | |2 |2 |1,000 ? 1. 254 |’ |1,254. 00 | | |3 |1 |1,200 ? 1. 120 |’ |1,344. 0 | | | | | | |$3,862. 50 | | | | |Solution from calculator: |$3,862. 84 | |B |1 |5 |$30,000 ? 1. 762 |’ |$52,860. 00 | | |2 |4 |25,000 ? 1. 574 |’ |39,350. 00 | | |3 |3 |20,000 ? 1. 405 |’ |28,100. 00 | | |4 |2 |10,000 ? 1. 254 |’ |12,540. 0 | | |5 |1 |5,000 ? 1. 120 |’ |5,600. 00 | | | | | | |$138,450. 00 | | | | |Solution from calculator: |$138,450. 79. | |C |1 |4 |$1,200 ? 1. 574 |’ |$1,888. 80 | | |2 |3 |1,200 ? 1. 405 |’ |1,686. 00 | | |3 |2 |1,000 ? 1. 254 |’ |1,254. 0 | | |4 |1 |1,900 ? 1. 120 |’ |2,128. 00 | | | | | | |$6,956. 80 | | | | |Solution from calculator: |$6,956. 53 | (b)The payments are made at the beginning of each period the present value of each the end-of-period cash flow streams will be multiplied (1 + i) to get the present value of the beginning-of-period cash flows. A$3,862. 50 (1 + 0. 12)’ $4,326. 00 B$138,450. 00 (1 + 0. 12)’ $155,064. 00 C$6,956. 80 (1 + 0. 2)’ $7,791. 62 References Books: Gitman, Lawrence J.. Principles of Managerial Finance. ,. International Book 11th Edition, Boston, Mass. ; London : Pearson Prentice Hall, c2008. Gitman, Lawrence J.. Principles of Managerial Finance. ,. International Book 9th Edition, Boston, Mass. ; London : Pearson Prentice Hall, c2000. Gallagher, Timothy J and Joseph D. Andrew JR, Financial Management, 3rd Edition, (2003), Prentice Hall Inc, New Jersey. Internet: http://www. ehow. com/how_2049322_use-financial-calculator. html http://en. wikipedia. org/wiki/Financial_ratio http://www. va-interactive. com/inbusiness/editorial/finance/ibt/ratio_analysis. html