1. You want to have $13,000 saved ten years from now. How much less do you have to deposit today to reach this goal if you can earn 6% rather than 5% on your savings?
a. $582.94
b. $721.74
c. $666.22
d. $555.18
e. $610.70
2. A firm has an ROE of 8% and an ROA of 3.5%. What is the sustainable growth rate if the firm has a 40% retention ratio?
a. 9.19%
b. 3.31%
c. 8.10%
d. 8.81%
e. 3.09%
3. What is the total future value six years from now of $110 received in one year, $200 received in two years, and $800 received in six years if the discount rate is 8%?
a. $1,269.15
b. $1,196.99
c. $1,145.56
d. $1,233.72
e. $1,152.91
4. You have the following data for the ABC. What is ABC's return on assets (ROA)? Return on equity = 15%; Earnings before taxes = $30,000; Total asset turnover = 2; Profit margin = 4.5%; Tax rate = 35%.
a. 3.9%
b. 9.0%
c. 3.6%
d. 4.5%
e. 6.4%