College of Administrative
and Financial Sciences
Assignment 1
Principles of Finance (FIN101)
Deadline for students: (2/10/2022@ 23:59)
Course Name: Principles of Finance
Student’s Name:
Course Code: FIN101
Student’s ID Number:
Semester: 1st
CRN:
Academic Year: 1444/1445 H, Second Semester
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Level of Marks:
Instructions – PLEASE READ THEM CAREFULLY
❖ This assignment is an individual assignment.
❖ The Assignment must be submitted only in WORD format via the allocated
folder.
❖ Assignments submitted through email will not be accepted.
❖ Students are advised to make their work clear and well presented. This also
includes filling in your information on the cover page.
❖ Students must mention question numbers clearly in their answers.
❖ Late submitted assignments will NOT be entertained.
❖ Avoid plagiarism; the work should be in your own words; copying from students
or other resources without proper referencing will result in ZERO marks. No
exceptions.
❖ All answered must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions:
(Marks: 15)
1. A company had cash and marketable securities worth $200,000 accounts payables
worth $51,000, inventory of $1,501,500, accounts receivables of $5,288,128, shortterm notes payable worth $220,000, other current liabilities of 100,000, and other
current assets of $121,800. Calculate the company net working capital and describe
how managers manage the firm working capital. (2 Marks)
2. Your parents have given you $1,500 a year before your graduation so that you can
take a trip when you graduate. You wisely decide to invest the money in a bank CD
that pays 7% interest. You know that the trip costs $1600 right now and that
inflation for the year is predicted to be 3%. Will you have enough money in a year to
purchase the trip? Show your calculations. (2 Marks)
3. If the following financial information related to XYZ Company. Total Revenues last
year $970, depreciation expenses $50, costs of goods sold $450, and interest
expenses $55. At the end of the year, current assets were $121 and current liabilities
were $107. The company has an average tax rate of 35%. Calculate the net income
for XYZ Company by setting up an income statement. (2 Marks)
4. Calculate the common-size balance sheet from the following information for the
company: (2 Marks)
Cash
Acct/Rec
Inventories
Total Current assets
Net fixed assets
Total assets
50,000
60,000
200,500
310,500
132,000
442,500
Accts/Pay
Accrued expenses
Short-term N/P
Current liabilities
Long-term debt
Total liabilities
Owner’s equity
Total liabilities and
owners’ equity
25,800
30,000
9,700
65,500
150,000
215,500
227,000
442,500
5. Ten years ago, Amanda Cortez invested $20,000 in an account paying an annual
interest rate of 5%. What is the value of the investment today? What is the interest
on interest earned on this investment? (2 Marks)
6. You have just won a lottery that promises an annual payment of $120000 beginning
immediately. You will receive a total of 15 payments. If you can invest the cash flow
in an investment that is paying 8% annually, what is the present value of this
annuity? (2 Marks)
7. XXX company has forecast a rate of return of 20% if the economy booms (30%
probability); a rate of return of 19% if the economy in in a growth phase (40%
probability); a rate of return of 2.50% if the economy in in decline (20% probability);
and a rate of return of -10% if the economy in a depression (10% probability). What
is the company standard deviation of returns? (3 Marks)
Purchase answer to see full
attachment
and Financial Sciences
Assignment 1
Principles of Finance (FIN101)
Deadline for students: (2/10/2022@ 23:59)
Course Name: Principles of Finance
Student’s Name:
Course Code: FIN101
Student’s ID Number:
Semester: 1st
CRN:
Academic Year: 1444/1445 H, Second Semester
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Level of Marks:
Instructions – PLEASE READ THEM CAREFULLY
❖ This assignment is an individual assignment.
❖ The Assignment must be submitted only in WORD format via the allocated
folder.
❖ Assignments submitted through email will not be accepted.
❖ Students are advised to make their work clear and well presented. This also
includes filling in your information on the cover page.
❖ Students must mention question numbers clearly in their answers.
❖ Late submitted assignments will NOT be entertained.
❖ Avoid plagiarism; the work should be in your own words; copying from students
or other resources without proper referencing will result in ZERO marks. No
exceptions.
❖ All answered must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions:
(Marks: 15)
1. A company had cash and marketable securities worth $200,000 accounts payables
worth $51,000, inventory of $1,501,500, accounts receivables of $5,288,128, shortterm notes payable worth $220,000, other current liabilities of 100,000, and other
current assets of $121,800. Calculate the company net working capital and describe
how managers manage the firm working capital. (2 Marks)
2. Your parents have given you $1,500 a year before your graduation so that you can
take a trip when you graduate. You wisely decide to invest the money in a bank CD
that pays 7% interest. You know that the trip costs $1600 right now and that
inflation for the year is predicted to be 3%. Will you have enough money in a year to
purchase the trip? Show your calculations. (2 Marks)
3. If the following financial information related to XYZ Company. Total Revenues last
year $970, depreciation expenses $50, costs of goods sold $450, and interest
expenses $55. At the end of the year, current assets were $121 and current liabilities
were $107. The company has an average tax rate of 35%. Calculate the net income
for XYZ Company by setting up an income statement. (2 Marks)
4. Calculate the common-size balance sheet from the following information for the
company: (2 Marks)
Cash
Acct/Rec
Inventories
Total Current assets
Net fixed assets
Total assets
50,000
60,000
200,500
310,500
132,000
442,500
Accts/Pay
Accrued expenses
Short-term N/P
Current liabilities
Long-term debt
Total liabilities
Owner’s equity
Total liabilities and
owners’ equity
25,800
30,000
9,700
65,500
150,000
215,500
227,000
442,500
5. Ten years ago, Amanda Cortez invested $20,000 in an account paying an annual
interest rate of 5%. What is the value of the investment today? What is the interest
on interest earned on this investment? (2 Marks)
6. You have just won a lottery that promises an annual payment of $120000 beginning
immediately. You will receive a total of 15 payments. If you can invest the cash flow
in an investment that is paying 8% annually, what is the present value of this
annuity? (2 Marks)
7. XXX company has forecast a rate of return of 20% if the economy booms (30%
probability); a rate of return of 19% if the economy in in a growth phase (40%
probability); a rate of return of 2.50% if the economy in in decline (20% probability);
and a rate of return of -10% if the economy in a depression (10% probability). What
is the company standard deviation of returns? (3 Marks)
Purchase answer to see full
attachment
