solve problems using Excel

Module 04

Problem 4.1
How many years will the following take?
1022 SAR to grow to 1,369.58 SAR if invested at 5 percent compounded annually.
N	??
I	0.05
PV	-1022
PMT	0
FV	1369.58
Problem 4.2
4.2.a. Assume that you plan to buy a vehicle in 5 years and you need to save for a down payment.
You plan to save 500 SAR per year (with the first deposit made immediately), and you will deposit the funds in a bank account that pays 2% interest.
How much will you have after 5 years?
N	5
I	2%
PV	$0
PMT	-$500
4.2.b. How much will you have if you make the deposits at the end of each year?
N	5
I	2%
PV	$0
PMT	-$500
Problem 4.3
4.3.a Suppose a U.S. government bond promises to pay 2,249.73 SAR four years from now. If the going interest rate on 4-year government bonds is 3%, how much is the bond worth today?
N	4
I	0.03
PMT	0
FV	2249.73
4.3.b How would your answer change if the bond matured in 5 years rather than 4 years?
N	5
I	0.03
PMT	0
FV	2249.73
4.3.c. What if the interest rate on the 5-year bond was 6% rather than 3%?
N	5
I	0.06
PMT	0
FV	2249.73
4.3.d. How much would 1,000,000 SAR due in 50 years be worth today if the discount rate was 5%?
N	50
I	0.05
PMT	0
FV	1000000
4.3.e If the discount rate was 20%?
N	50
I	0.2
PMT	0
FV	1000000
4.4 ABC Corporation balance sheet and income statement are provided. The finanical ratios to be completed are listed below. However, to complete the ratios the balance sheet and income statement totals should also be calculated.
ABC Corporation							ABC Corporation
Balance Sheet							Income Statement
December 31, 20XX						As of December 31, 20XX
Assets:
Cash	250					Sales	8600
Accounts receivable	550					Cost of goods sold	2350
Inventories	750					Gross profits	??
Other current assets	200					Operating expenses:
Total current assets	??					Selling and G&A expenses	850
Gross fixed assets	2500					Depreciation expenses	125
Accumulated depreciation	-1000					Total operating expenses	??
Net fixed assets	1500					Operating income (earnings before interest and taxes)	??
Total assets	??					Interest expense	50
LIABILITIES (DEBT) AND EQUITY						Earnings before taxes	??
Accounts payable	250					Income taxes	300
Short-term notes payable	90					Net Income	??
Total current liabilities	??
Long-term debt	960
Total liabilities	??
Common stock (par & paid in capital)	1000					Other Information
Retained earnings	950					Number of shares (thousands)	240
Total common equity	1950					Dividends (thousands)	175
Total liabilities and equity	??					Market price per share	35
Ratios
Current ratio
Acid-test ratio
Days in receivables
Days in inventories
Operating return on assets
Operating profit margin
Total asset turnover
Fixed asset turnover
Debt ratio
Times interest earned
Return on equity
Earnings per share
Dividends per share
Price/Earnings
Book value per share
Market/Book
Problem 4.5
You are making car payments of 500 SAR per month for the next 5 years, you know that your car loan has an interest rate of 8.4%, discounted monthly, what was the initial price of the car?
	Rate	Nper	FV	Payment
PV	0.084	60	0	-500		Periods = 5 years x 12 months
Problem 4.6
Suppose you have to borrow 13,000 SAR at an interest rate of 5.5% (compounded quarterly) for a period of 6 years. What will be the loan amount you need to pay at the end of 6 years?
	Rate	NPER	PMT	PV
FV	5.5%/4	6*4	0	13,000
Problem 4.7.a
Calculate payment of 5,000 SAR made at the end of each year for 25 years, with an interest rate of 7%.
	Rate	NPER	PMT	Type
	0.07	25	-5,000	0
4.7.b	Calculate payment of 5,000 SAR made at the beginning of each year for 25 years, with an interest rate of 7%.
	Rate	NPER	PMT	Type
	0.07	25	-5000	1