1) I have an investment that will pay me $20 every quarter for the next 5 years. Assuming that I want a 12% return compounded quarterly, what price should I pay for the investment?
2) If the price of the European euro is $1.6365 (quoted at $1.6365 / euros), how many euros are necessary to purchase $1.00?
3) You require $20,000 in 8 years for a down payment on a house. You are planning on depositing equal annual payments in an account earning 4% at the end of each year for the next 8 years. What is the dollar value of the payments required to reach your goal of $20,000?
4) For each of the following ratios indicate whether the firm’s ratios are good or poor as compared to industry averages by placing a check in the correct column.
Company Industry Good Poor
Inventory turnover 2.5 4
Average collection period of receivables 8days 16 days
Quick ratio 1.1 3
Return on assets 6.1% 4.0%
Debt Ratio 75% 50%