Question:
Problem 1
Consider you want to purchase a million dollar home in twenty five years
How much money should you invest each year at 10 percent to purchase the house in cash?
Problem 2
Decision making. Consider that a person has the following options:
a. Placing $ 10,000 in a saving account paying 6 percent compounded semiannually or
b. investing in a business such that the value of the investment after 8 years is 16,000. Which is a better investment?
Problem 3
Corleone Olive Oil Company had the given account balances at August 31, 2011
Hint: Evaluate net income and ratios
Accounts Payable
Accounts Receivable
Accumulated depreciation
Cash
Cost of Goods Sold
Equipment
Inventory
Owner's Equity
Rent expense
Sales revenue
Wages payable
Bumber of common shares
Required: Determine the following ratios:
1. Earnings per share
2. Debt to equity
3. Current ratio
4. Quick ratio
5. Return on Equity