FIN 101 Finance

Q1.What is net working capital? Why a low value for this number might be considered

Undesirable?

Q2. . If you were given a choice of investing in an account that paid quarterly interest and one that paid monthly interest, which one should you choose if they both off are the same stated interest rate and why?

Q3. DuPont Equation: Lemmon Enterprises has a total asset turnover of 4.2 and a net profit margin of 9.5%. If its equity multiplier is 1.70, what is the ROE for Lemmon Enterprises? LO 4

Q4. Brittany Willis is looking to invest for retirement, which she hopes will be in 20 years. She is looking to invest $22,500 today in U.S. Treasury bonds that will earn interest at 6.25 percent annually. How much will she have at the end of 20 years? (Round to the nearest dollar.)

Q5. What is the difference between a growing annuity and a growing perpetuity?