finance

Question 1: State weather each below statement is True Or False Statements: (10 )

1. When share split happens the value of the company will be the same, but the number of shares will decrease

2. Normal Payback Period is the number of years required to recover the funds invested in a project from its operating cash flows.

3. Investing activities are how much cash is generated from companies’ products or services.

4. Market Value ratios are how well company is using its assets and liabilities internally.

5. If the Profitability Index is higher than 1, the project generates value and the company may want to proceed with the project.

Question 2: Calculations Exercises: (45 points)

Show your calculations and formula to earn full grade

1. Coosto24 Company reported Current Assets of $600,000 and Current Liabilities of $320,000. Calculate working capital and explain the results (15 points)

2. TheCompanyDENhasabetaof1.30.Therisk-freerateofreturnis1.90 percent and the market rate of return is 5.10 percent. What is the CAPM cost of equity? (15 points)

c. Calculate EPS (Earning Per Share) based on the given data below: (15 points)

Sales	1,400 $
COGS	210
Interest Paid	50
preferred dividends	70
Number of Common Stock outstanding	85

Question 3: problem solving (45 points)

MarCo Limited has an initial cost of $65,000 expected net cash inflows of $22,000 per year for 4 years, and a cost of capital of 5%.

(a) Calculate the Normal Payback Period: (5 points)

(b)Calculate the NPV: (25 points)

(c) Calculate the Profitability Index: (5 points)

(d) Do you think the project be accepted and why? (10 points)