A local company presented you with the following financial data: A & B firm reported that...

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Finance

A local company presented you with the following financial data:A & B firm reported that its sales for 2018 was $125,000 withtotal costs of $100,000 and there was no taxes. The owner alsoreported $15,000 in cash, $20,000 in inventory and $30,000 ofaccounts payable. Also there was $70,000 in net fixed assets with$15,000 in accounts receivables. It included that there was $40,000in long term debt. The Company also pay 25 percent of the netincome as cash dividend.
1. Compute the firm's internal growth rate. Compute thesubstainable growth rate. If you deposit $1200 in bank that pay 15%annual rate, what will this money be worth in five years? What isthe present value of $45,000 that you will receive six years fromtoday if the discount rate is 12%? What is the annual interest rateyou must earn if you wish to turn a $5,000 deposit in an accountfor seven years into $8,250?

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3.8 Ratings (519 Votes)

i Internal growth rate Retention ratio Return on assets Here a Retention ratio 1 dividend payout ratio 25 or 025 Retention ratio 1 025 075 b Return on assets Net income Total assets Net income Sales Total cost Tax Net income 125000 100000 0 25000 Total assets Cash Inventory Net fixed assets Accounts receivables Total assets 15000 20000 70000 15000 120000 Now Return on assets 25000 120000 02083 Put See Answer

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A local company presented you with the following financial data:A & B firm reported that its sales for 2018 was $125,000 withtotal costs of $100,000 and there was no taxes. The owner alsoreported $15,000 in cash, $20,000 in inventory and $30,000 ofaccounts payable. Also there was $70,000 in net fixed assets with$15,000 in accounts receivables. It included that there was $40,000in long term debt. The Company also pay 25 percent of the netincome as cash dividend.1. Compute the firm's internal growth rate. Compute thesubstainable growth rate. If you deposit $1200 in bank that pay 15%annual rate, what will this money be worth in five years? What isthe present value of $45,000 that you will receive six years fromtoday if the discount rate is 12%? What is the annual interest rateyou must earn if you wish to turn a $5,000 deposit in an accountfor seven years into $8,250?