FINS1613 Study Guide - Quiz Guide: 18 Months, Balloon Payment Mortgage
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Times-Interest-Earned Ratio
The Morris Corporation has $1,000,000 of debt outstanding, andit pays an interest rate of 10% annually. Morris's annual sales are$5 million, its average tax rate is 35%, and its net profit marginon sales is 3%. If the company does not maintain a TIE ratio of atleast 3 to 1, its bank will refuse to renew the loan and bankruptcywill result. What is Morris's TIE ratio? Round intermediatecalculations to two decimal places. Round your answer to twodecimal places.
Last year Mason Inc. had a total assets turnover of 1.33 and anequity multiplier of 1.75. Its sales were $375,000 and its netincome was $10,549. The CFO believes that the company could haveoperated more efficiently, lowered its costs, and increased its netincome by $5,250 without changing its sales, assets, or capitalstructure. Had it cut costs and increased its net income in thisamount, by how much would the ROE have changed?
Select the correct answer.
Times-Interest-Earned Ratio The Morris Corporation has $1,000,000 of debt outstanding, andit pays an interest rate of 10% annually. Morris's annual sales are$5 million, its average tax rate is 35%, and its net profit marginon sales is 3%. If the company does not maintain a TIE ratio of atleast 3 to 1, its bank will refuse to renew the loan and bankruptcywill result. What is Morris's TIE ratio? Round intermediatecalculations to two decimal places. Round your answer to twodecimal places. Last year Mason Inc. had a total assets turnover of 1.33 and anequity multiplier of 1.75. Its sales were $375,000 and its netincome was $10,549. The CFO believes that the company could haveoperated more efficiently, lowered its costs, and increased its netincome by $5,250 without changing its sales, assets, or capitalstructure. Had it cut costs and increased its net income in thisamount, by how much would the ROE have changed? Select the correct answer.
Future Value of a Single Payment If you deposit $10,000 in a bank account that pays 8.1% interestannually, how much would be in your account after 5 years? Roundyour answer to the nearest cent. $ Present Value of a Single Payment What is the present value of a security that will pay $20,000 in20 years if securities of equal risk pay 5.3% annually? Round youranswer to the nearest cent. $ Your parents will retire in 18 years. They currently have$240,000, and they think they will need $1 million at retirement.What annual interest rate must they earn to reach their goal,assuming they don't save any additional funds? Round your answer totwo decimal places. % Number of Periods of a Single Payment If you deposit money today in an account that pays 6.1% annualinterest, how long will it take to double your money? Round youranswer to the nearest whole number. years | |||||||||||||||||||
Future Value of a Single Payment
If you deposit $10,000 in a bank account that pays 8.1% interestannually, how much would be in your account after 5 years? Roundyour answer to the nearest cent.
$
Present Value of a Single Payment
What is the present value of a security that will pay $20,000 in20 years if securities of equal risk pay 5.3% annually? Round youranswer to the nearest cent.
$
Your parents will retire in 18 years. They currently have$240,000, and they think they will need $1 million at retirement.What annual interest rate must they earn to reach their goal,assuming they don't save any additional funds? Round your answer totwo decimal places.
%
Number of Periods of a Single Payment
If you deposit money today in an account that pays 6.1% annualinterest, how long will it take to double your money? Round youranswer to the nearest whole number.
years