Question

Question Completion Status: A firm has not working capital of 58,200 and current assets of 537.500. What is the current ratio? O 69 78 1.28 145 1.67 QUESTION 14 You want to borrow 53,600 for 36 months and can afford monthly payments of 5110, but no more. Assuming monthly compounding, what is the chest Rate you can afford 5 45 percent 5.84 percent 6.29 percent 5.78 percent 6.68 percent ? QUESTION 15 A firm has total amets of 5638.727. Current assets of 203.015, current liabilities of $122.008, and total debt of 5348.092 What is the obtuli 103 120 1.31 1.43 87

Answer 1

Answer of Question 13: The correct answer is 1.28

Working Capital = Current Assets – Current Liabilities
$8,200 = $37,500 – Current Liabilities
Current Liabilities = $37,500 - $8,200
Current Liabilities = $29,300

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $37,500 / $29,300
Current Ratio = 1.28

Answer of Question 14: The correct answer is 6.29%

Amount Borrowed = $3,600
Monthly Payment = $110
Number of Payments = 36

Let monthly interest rate be i%

$3,600 = $110 * PVIFA(i%, 36)

Using financial calculator:
N = 36
PV = -3600
PMT = 110
FV = 0

I = 0.525%

Monthly Interest Rate = 0.525%
Annual Interest Rate = 12 * 0.525%
Annual Interest Rate = 6.29%

Answer of Question 15: The correct answer is 1.20

Total Equity = Total Assets – Total Debt
Total Equity = $638,727 - $348,092
Total Equity = $290,635

Debt-Equity Ratio = Total Debt / Total equity
Debt-Equity Ratio = $348,092 / $290,635
Debt-Equity Ratio = 1.20