1. The debt-to-equity ratio compares a company’s total debt to shareholders’ equity. If a company’s shareholders’ equity is $25,000,000 and total debt is $75,000,000 then which of the following statements is true:
The company owners are investing in the company at three times the rate the company is taking on debt.
The company is taking on debt at one-third the rate that its owners are investing in the company.
The company is taking on debt at twice the rate that its owners are investing in the company.
The company is taking on debt at three times the rate that its owners are investing in the company.
2. You expect to receive $28,000 at graduation in two years. You plan on investing it at 9.75 percent until you have $163,000.
How long will you wait from now? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
3. You are scheduled to receive $14,000 in two years. When you receive it, you will invest it for eight more years at 9.5 percent per year.
How much will you have in ten years? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)