1) Cash and Equivalents are $1,561, Short-Term Investments are $1,052, Accounts
ID: 2708500 • Letter: 1
Question
1) Cash and Equivalents are $1,561, Short-Term Investments are $1,052, Accounts Receivables are $3,616, Accounts Payable is $5,173, Short-Term Debt is $288, Inventories are $1,816, Other Current Liabilities are $1,401, and Other Current Assets are $707. What are the Total Current Assets?
A) $6,936 B) $8,752 C) $6,862 D) $5,136
2) In 1975, the era of major league baseball free agency began. The average player salary was $16,000. In 1980, the average salary was $30,000. What was the average annual growth in the minimum salary in major league baseball over those five years?
A) 13.40% B) 10.67% C) 37.50% D) 5.92%
3) You have just won the Reader's Digest lottery of $5,000 per year for twenty years, with the first payment today followed by nineteen more start-of-the-year cash flows. At an interest rate of 5%, what is the present value of your winnings?
A) $100,000.00 B) $62,311.05 C) $65,426.60 D) $47,641.18
Please give me correct answers to all three questions, I will definitely award you the points.....plz must be correct
Explanation / Answer
1) Current assets include :
Cash and equivalents + short term investments + Accounts receivables + other current assets + inventories
= 1561 + 1052 + 3616 + 707 + 1816
$ 8752
Option B
2) Po(1 + i)^n = Pn
(1+i)^n = Pn / Po = 30000 / 16000 = 1.875
n = 5 years
1+i = (1.875)^(0.2) = 1.13396
i = 0.13396 = 13.396 % = 13.40% is the growth rate
option A
3)
the present value of winnings =
5000 + 5000/1.05 + 5000/1.05^2 + .............. 5000 / 1.05^19
= 5000 [ 1 - (1/1.05)^20 ] / [ 1 - 1/1.05 ]
= 65,426 .60 $
option C
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