Computation of net income and annual rate of return and npv

Reference no: EM1313998

Computation of net income and annual rate of return and NPV

1. The Apricot Company in 2001 had notes payable of $1,200, accounts payable of $2,400, and long-term debt of $3,000. The corresponding entries for 2002 are $1,600, $2,000, and $2,800. For assets, Apricot had in 2001 $800 in cash, $400 in marketable securities, and $1,800 of inventory. The corresponding entries for 2002 are $500, $300, and $2,000. Accounts receivable at the end of 2001 were $900 and $800 at the end of 2002. Apricot's net plant and equipment was $6,000 in 2001 and $8,000 in 2002. Construct Apricot Company's balance sheet for 2001 and 2002. What is total owners' equity for 2002?

2. Continuing the previous problem, Apricot Company had sales of $1,000 during 2002 cost of goods sold was $400, depreciation was $100, and paid $160 of interest. The tax rate is 35% and all taxes are paid currently. What is Apricot's net income for the year?

3. An investment today of $4500 is worth $17,000 in 9 years. What annual interest rate would the investment earn?

4. An investment offers cash flows of $300, -$200, -$125 each year starting at time zero. What is the net present value of this investment if the market rate of interest is 15%?

5. You just won $150,000 in the state lottery. Lottery rules do not allow a lump-sum payment. Instead, the lottery will pay you $5,000 per year for the next 10 years, followed by payments of $10,000 per year for the next ten years. How much are your winnings actually worth today? The appropriate interest rate is 8% per year.

Reference no: EM1313998

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