# Corporate Finance

1.What is the future value of $1,000, placed in a saving account for four years if the account pays 8%, compounded quarterly?

2..Your brother, who is 6 years old, just received a trust fund that will be worth $25,000 when he is 21 years old. If the fund earns 10 percent interest compounded annually, what is the value of the fund today?

3 .If you were to borrow $10,000 over two years at 12% compounded monthly, what would be your monthly payment?

4.. John is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each of the next 25 years so that he can retire at age 60. He expects to live to about 80, and wants to be able to withdraw $25,000 per year from the account on his 61st through 80th birthdays. The account is expected to earn 10 percent per annum for the entire period of time. Determine the size of the annual deposits that must be made by John.

5.. A firm's current ratio is 1.5, and its quick ratio is 1.0. If its current liabilities are $12,000, what are its

inventories?

6.The following is the income statement of a firm.

Sales $100,000

COGS 80,000

Gross Profit 20,000

Cash Expenses 8,000

Depreciation 1,600

EBIT 10,400

Interest 800

EBT 9,600

Taxes 3,600

Net Income $ 6,000

Its net profit margin is:

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#### Solution Summary

The solution answers various corporate finance related questions. (future value, present value of fund, size of annual deposit required for retirement, inventories, net profit)