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Finance : Shareholder's Equity, Interest, Payback and Percent

1) Brentwood Bat Factory Inc., has current assets of $3,400, net fixed assets of $7,100, current liabilities of $1,900 and long term debt of $5,200. What is the value of the Shareholder's equity account for this firm? How much is net working capital?

4) Assume that a college education will cost $280,000 when your child enters college in 18 years. You currently have $39,000 saved. What annual rate of interest must you earn to cover the cost of the education?

6) An investment project provides cash inflows of $830 per year for 8 years. What is the projected payback if the initial cost is $3400? What if it is $4450? What if it is $6800?

15) Calculating Returns. Suppose a stock had an initial price of $83 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $91. Compute the percentage total return.

Solution Preview

1) Brentwood Bat Factory Inc., has current assets of $3,400, net fixed assets of $7,100, current liabilities of $1,900 and long term debt of $5,200. What is the value of the Shareholder's equity account for this firm? How much is net working capital?

First, we need to know that total assets = total liabilities + shareholder's equity.
Total Assets = Current assets + net fixed assets
= 3,400 + 7,100 = 10,500

Total Liabilities = Current liabilities + Long term debt
= 1,900 + ...

Solution Summary

This solution is comprised of a detailed explanation to answer what is the value of the Shareholder's equity account for this firm, how much is net working capital, what annual rate of interest must you earn to cover the cost of the education, what is the projected payback if the initial cost is $3400, and compute the percentage total return.

$2.19