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Rocking Horse Corp, Charlie Spleen, Oliver Inc

1)Rocking Horse Corporation reported net income for 2004 of $100,000, sales of $300,000, expenses (excluding depreciation) of $150,000, and depreciation expense of $50,000. The company's accounts receivable balance increased by $25,000 during the year and its accounts payable balance remained the same. The company's change in cash for the year is estimated to be:
A)$125,000 B) $175,000 C) $100,000 D) $300,000

2)Charlie Spleen wants to retire in 25 years, and he wants to have an annuity of $20,000 a year for 20 years after retirement. Charlie wants to receive the first annuity payment at the end of the 25th year. Using an interest rate of 8%, how much must Charlie invest today in order to have his retirement annuity (round to nearest $10).
A)$28,670 B) $30,970 C) $26,440 D) $23,720

3)How much would you be willing to pay for a 10-year ordinary annuity if the payments are $500 per year and the rate of return is 6.25% annually?
A)$4,132 B) $3,637 C) $3,864 D) $3,423

4)You purchased 1,000 shares of Oliver Inc. common stock one year ago for $50 per share. You decided to take your profit today by selling at $55.00 per share. What is your holding period return?
A)15.0% B) 12.5% C) 10.0% D) 50.0%

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Financial Management
1)Rocking Horse Corporation reported net income for 2004 of $100,000, sales of $300,000, expenses (excluding depreciation) of $150,000, and depreciation expense of $50,000. The company's accounts receivable balance increased by $25,000 during the year and its accounts payable balance remained the same. The company's change in cash for the year is estimated to be:

A)$125,000 B) $175,000 C) $100,000 D) $300,000

Answer: A
Net income + Depreciation - Accounts Receivable = 100,000 + 50,000 - 25,000 = 125,000

2)Charlie Spleen wants to retire in 25 ...

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