Question

Twelve years from now, you will be inheriting 560,000 What is this inheritance worth to you today if you can earn 60 percent interest.compounded annually? 529 818 16 529 945 94 $58,419 05 $61.798 47 553,003.15 QUESTION 20 Shty years ago, your grandparents opened two Savings accounts and deposited $250 lp each account The Best account wash Bank second account was with Country Bank at 365 percent compounded annually. Which one of the following is true coming the calculations.) 35 p s o unded ono by The intermediate The City Bank account is currently worth $2.075.42 The City Bank account has paid $45 19 more interest than the Country Bank account The Country Bank account is currently worth $2.17032 The Country Bank account has paid 572 24 more in interest than the Chy Bank account The Country Bank account has paid 151 30 more interest than the Chy Bank account QUESTION 21 Which one of the following is a measure of long-term solvency? Price earnings ratio Profit margin Cash coverage ratio Receivables tumover Quick ratio

Answer 1

19	Formula for caluclation of present value	=	Amount/ (1+rate)^n
	Present value	=	60,000/(1+0.06)^12
		=	29818.16
20	Formula for calculating Future value	=	Amount*(1+rate)^n
	City bank	=	250*(1+0.036)^60
			2087.014
	Country bank	=	250*(1+0.0365)^60
			2148.317
	Country bank has paid 61.30(2148.317-2087.014) more interest
21	Cash coverage ratio is a measure of long term solvency of the company. It measures ability of the firm to pay interest on its debt
	Price earning ratio is part of earning ratio
	Profit margin is part of profitability ratio
	Recievable turnover ratio is part of Turnover ratios
	Quick ratio is a part of Liquidity ratio