1.

You need to complete this problem in a spreadsheet and show all your work.  Create an excel file that shows your calculations.  Clearly indicate your final answer(s).  Name the file with the following convention:  Lastname-Problem#.xlsx.  For instance, Roark-Problem2.xlsx.

You are buying a car on a 4-year loan, with an interest rate of 4.99% per year.  You make monthly payments and borrowed a total of $19,900 for the car.

(a) What is the payment for the car?

(b) What is the total interest you would pay over the 4-year loan period if you only made the required payments each month?

(c) How quickly would you pay off the loan if you added $150 in extra principal to each month’s payments?  How many months would it take?

2.

You need to complete this problem in a spreadsheet and show all your work.  Create an excel file that shows your calculations.  Clearly indicate your final answer(s).  Name the file with the following convention:  Lastname-Problem#.xlsx.  For instance, Roark-Problem2.xlsx.

If you wanted to have $2,000,000 set aside for retirement in 25 years, how much would you have to save EACH MONTH if you currently had investments totaling $200,000 and you expected your investments to earn an average rate of return of 8.25% per year.

What if you wanted to retire in only 20 years?  How would your answer change?

3. 

You need to complete this problem in a spreadsheet and show all your work.  Create an excel file that shows your calculations.  Clearly indicate your final answer(s).  Name the file with the following convention:  Lastname-Problem#.xlsx.  For instance, Roark-Problem2.xlsx.

You have the year-end balance sheets for Wolken Enterprises (note that the most recent year is in the left column)

2013	2012
Sales	5,000,000	4,800,000
COGS	3,300,000	3,150,000
Selling, General & Administrative	386,000	296,000
Interest	1,200,000	1,200,000
Taxes	30,000	48,000
Net Income	84,000	106,000

Assets:	2013	2012
Cash	$  200,000	$  170,000
Accounts receivable	864,000	700,000
Inventories	2,000,000	1,400,000
Total current assets	$3,064,000	$2,270,000
Net fixed assets	6,000,000	5,600,000
Total assets	$9,064,000	$7,870,000
Liabilities and equity:
Accounts payable	$1,400,000	$1,090,000
Notes payable	1,600,000	1,800,000
Total current liabilities	$3,000,000	$2,890,000
Long-term debt	2,400,000	2,400,000
Common stock	3,000,000	2,000,000
Retained earnings	664,000	580,000
Total common equity	$3,664,000	$2,580,000
Total liabilities and equity	$9,064,000	$7,870,000

Calculate appropriate ratios and comment on the following:

(a) How did the liquidity of Wolken change from 2012 to 2013?

(b) How did Wolken’s use of leverage change from 2012 to 2013?

(c) How did Wolken’s profitability change from 2012 to 2013?

(d) How did the asset management of Wolken (defined as how effeciently they used their assets) change from 2012 to 2013?  In particular pay attention to Inventory Turnover, Days Sales Outstanding and TATO.

(e) How did the ROE change?  What caused the change in ROE?