# finance help for tvm

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?