present value in Annuity Due

16Find present value in Annuity Due

N = 5 years, monthly payments

Interest rate = 8%, compounded monthly

PMT = -1000x(8%/12)

FV = -1000

Compute PV

17Find present value in Ordinary annuity

N = 30 years, monthly payments

Interest rate = 8%, compounded monthly

PMT = -850

FV = 0

Compute PV

 Questions 18-27 use the same data

18Mortgage - Find payment

N = 20 years, monthly payments, starts at end of January

Interest rate = 7%, compounded monthly

PV = 350,000

FV = 0

Compute payment PMT

P1 = 1

P2 = 12

19Balance at end of December in first year

20Total Principal Repayment at end of first year

21Total Interest payments at end of first year

P1 = 61

P2 = 72

22Balance at end of December in 6th year

23Total Principal Repayment in 6th year

24Total Interest payments in 6th year

25Balance at end of December in 11th year

26Total Principal Repayment in 11th year

27Total Interest payments in 11th year

Questions 28 - 31 use the same data

28Find Mortgage payment

N = 30 years, monthly payment, Annuity Due

Interest rate = 5.25%, compounded monthly

PV = 200000

FV = 0

Compute PMT

Amortization schedule after 10 years - Same data as Q28

P1 = 1

P2 = 120

29Balance after 10 years of payments

30Total Principal Repayment after 10 years of payments

31Total interest payments after 10 years of payments

32Compute IRR using following data:

CF0=-10000

CF1=2500

CF2=2500

CF3=3500

CF4=3500

CF5=5000

33Compute NPV

Same cash flows as Q32

Interest rate = 8%

Part II:  Financial Statements Review (35 marks)

1.Build the Income Statement and Balance Sheet for CanDo Inc. based on the information given below, as of December 31, 2009.

Accounts payable$141,000

Accounts receivable$103,000

Cash and cash equivalents$154,000

CoGS$224,700

Common Stock $1,286,000

Depreciation$37,000

Dividend payout ratio40%

Interest paid$43,000

Inventory$129,000

Long-term debt$1,254,000

Net Fixed Assets$2,530,000

Sales$330,000

Short-term debt$132,000

Tax rate35%

Number of shares1,000,000

Price per share$0.50

The following table presents the data for CanDo Inc. in as of December 31 2008:

Accounts payable$104,000

Accounts receivable$146,000

Cash and cash equivalents$108,000

CoGS$224,700

Common Stock $1,286,000

Depreciation$37,000

Dividend payout ratio40%

Interest paid$43,000

Inventory$123,000

Long-term debt$1,254,000

Net Fixed Assets$2,467,000

Sales$330,000

Short-term debt$106,867

Tax rate35%

Calculate the following financial ratios for CanDo Inc. in the fiscal year of 2009:

a.Interval measure

b.Total debt ratio

c.Long-term debt ratio

d.Price-earnings (P/E) ratio

e.Market-to-book ratio