5/20/2018 w6 Homework Assignment
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BUSN 5200
Homework Assignment for Week 6:
For Week 6, please turn in the answers to the following
questions:
1. Why do we say money has time value?
2. Why is it important for usiness managers to e familiar with
time value of money!on!epts?
". #efine $resent %alue.
&. #efine Future %alue.
'. What are present value and future value interest factors? (as
in $%)F and F%)F*
6. (!al!ulating future value* +ou uy a 6 year, - # for /1,000.
)nterest is!ompounded annually. ow mu!h is it worth at
maturity?
. (!al!ulating present value* What3s the present value of /1,000
to e re!eived in years? (+our required rate of return is - a
year.*
. (!al!ulating the rate of return* 4 friend promises to pay you
/600 two years fromnow if you loan him /'00 today. What interest
rate is your friend offering you?
5. (!al!ulating the future value of an annuity* )f you invest
/100 a year for 20 yearsat - annual interest, how mu!h will you
have at the end of the 20th year?
10. (!al!ulating the present value of an annuity* ow mu!h would
you e willing topay today for an investment that pays /00 a year at
the end of the net 6 years?(+our required rate of return is '- a
year.*
Case Study Tasks:
1. 7efer to the ase 8tudy topi! le!ture on the Week ' ontent
page. 9sing the
information you otained last week, !omplete the $art ", 7atio
4nalysis portion ofthe !ase study report and sumit it along with
your regular homework (use aseparate file for the finan!ial
overview*. ote that your 7atio 4nalysis shouldin!lude ratios for
the years 2005 and 2010 and should in!lude !omparisons etweenthe
!ompany you are analy;ing and the !ompany sele!ted for
!omparison.
5/20/2018 w6 Homework Assignment
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(1* =iquidity> urrent ratio> ui!k ratio
omments on liquidity
(2* 4sset management> @otal 4sset turnover> 4verage
!olle!tion period (4$*
omments on asset management
("* #et management> #et ratio> @imes interest earned
omments on det management
(&* $rofitaility
> et profit margin> 7eturn on 4ssets (7 7eturn on Aquity
(7 Atended #u $ont equation
omments on profitaility to in!lude your !omments on the sour!es
of 7
