Question #1 Using the financial statements provided, calculate and interpret the days to collect ratio for each of the four years presented. Assume credit sales are 15% of total net sales.
Question #2 Using the financial statements provided, calculate and interpret the days to sell and gross profit ratio for each of the four years presented s.
Question #3 Using the financial statements provided, calculate and interpret the current liabilities ratios (including cash cycle) for each of the four years presented we discussed in class.
Question #4 Using the financial statements provided, calculate and interpret the long-term liabilities ratios we discussed in class.
Question #5 What is a firm's WACC? How is it calculated? How is it used?
Question #6 Consider the following potential investment, nisich has the same risk as the firm's other projects:
Time Cash Row
0 (5150,000)
1 $30,000
2 $45,000
3 $66,000
4 569,000
The firm's current weighted average cost of capital is 12%.
a) How much value will this investment create for the firm?
b) What is the internal rate of return?
c) Should the firm do this investment? Be sure to justify your recommendation.
d) How would your analysis change if this potential investment was more risky than the firm's other projects? Be specific.