Finance QS

1) MN Co. uses current asset policy
Total fixed assets $500,000
Debt/asset ratio 40%
Interest rate (on all debt) 8%
The alternative current assets polisies as a percentage of sales are: 30% 40% 50%
On the projected sales, earnings before interest and tax is 12%
Projected sales $4,000,000
Effective tax rate is 40%
Find E(ROE) based on each alternative.

2) Given the following information
The exchange rate between
The US dollars and the Euros € 1.25 = $ 1.00
The US dollars and the Canadian dollars $ 1.00 =C$ 1.50
Find the cross exchange rate between Euros and Canadian dollars

3)Assume the following
The exchange rate between
The US dollars and the Frank fr. 1.00 = $ 0.60
In the comparison to the $,
Tomorrow the Swiss Frank is expected to appreciated by 10%
How many Swiss Frank would a dollar buy tomorrow

4) Assume the following
The exchange rate between
The US dollars and the Frank fr. 1.00 = $ 0.60
In the comparison to the $,
Tomorrow the Swiss Frank is expected to appreciated by 10%
How many Swiss Frank would a dollar buy tomorrow

4) Assume the following with respect to US dollar an pound
The dollar cost of a Swiss Frank is $ 0.60
Because of US economic situation,
the fr. will be appreciated to $ 0.66
Or increased to 10.00%
Before appreciation, how many pounds, one dollar can buy
After appreciation, how many pounds, one dollar can buy

5)Two companies have the following data for 20X1
Current assets policies Co1 Co2
Current assets (% of sales) $1,200,000 $1,600,000
Total fixed assets $500,000 $500,000
Total assets
Short Term Debt 80,000 140,000
Long Term Debt $600,000 $700,000
Equity $1,020,000 $1,260,000
Total liabilities and equities

Sales $4,000,000 $4,000,000
EBIT $480,000 $480,000
Interests (10% of Long Term Debt)
Earnings before tax
Tax (40%)
Net income
Find return on assets and return on equity for each company

6) Two companies have the following data for 20X1
Current assets Co1 Co2
Current assets (% of sales) $1,200,000 $1,600,000
Total fixed assets $500,000 $500,000
Total assets
Short Term Debt 80,000 140,000
Long Term Debt $600,000 $700,000
Equity $1,020,000 $1,260,000
Total liabilities and equities

Sales
EBIT (as a percentage of Sales) 12% 14%
Interests (percentage of Long Term Debt) 10% 12%
Earnings before tax
Tax 40% 40%
Net income (percentage of sales) 1% 1.5%
ROA ? ?
Find total sales and return on assets (ROA)

Additional Requirements

 

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