XYZ stock price and dividend history are as follows:

An investor buys six shares of XYZ at the beginning of 2015, buys another two shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all seven remaining shares at the beginning of 2018.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. (Negative amounts should be indicated by a minus sign.)

b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.)

Cost of capital 14%

Calculate:

• Payback period
• Average rate of return on initial investment
• Net present value

A 20-year-old student wants to save $1000 a year for her retirement. Every year she invests $1000 in a mutual fund with an expected annual return of 8%. How much money will she have when she is 65 years old? Assume that she invests right away and did not have any money in her saving account.

Part B

The same student, she wants to save $100 a month instead of $1000 a year. How much money will she have when she is 65 years old?

Part C

The same student, she wants to have $1,000,000 in her account when she is 65 years old. How much money she should invest per month? If her mom gives her an additional $1000 for investing at the beginning. Use this as a present value.

XYZ's stock price and dividend history are as follows:

An investor buys three shares of XYZ at the beginning of 2016, buys another two shares at the beginning of 2017, sells one share at the beginning of 2018, and sells all four remaining shares at the beginning of 2019.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answer to 2 decimal places. Do not round other calculations.)

b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2016, to January 1, 2019. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answers to 4 decimal places. Negative amount should be indicated by a minus sign.)

XYZ stock price and dividend history are as follows:

An investor buys four shares of XYZ at the beginning of 2015, buys another two shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all five remaining shares at the beginning of 2018.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018.

1-4 $25,000 per year (payments at the end of the year)

5-9 $20,000 per year (payments at the end of the year)

Assume an interest rate of 6% compounded annually. Calculate the present value of the stream of cash flows above.

PINNACLE PLUS Horizontal Analysis Increase (Decrease) in the Current year (versus Previous year) Current Year Previous Year Amount Percentage Income Statement Sales Revenue $120,000 $106,000 % Cost of Goods Sold 54,000 49,000 Gross Profit 66,000 57,000 Operating Expenses 41,000 35,500 Interest Expense 5,000 5,000 Income before Income Tax Expense 20,000 16,500 Income Tax Expense (30%) 6,000 4,950 Net Income $14,000 $11,550 % Balance Sheet Cash $77,900 $43,000 % Accounts Receivable, Net 19,000 10,000 Inventory 26,000 40,000 Property and Equipment, Net 96,000 110,000 Total Assets $218,900 $203,000 % Accounts Payable $44,000 $36,000 % Income Tax Payable 3,000 1,500 Note Payable (long-term) 50,000 50,000 Total Liabilities 97,000 87,500 Common Stock (par $10) 87,000 87,000 Retained Earnings† 34,900 28,500 Total Liabilities and Stockholders’ Equity $218,900 $203,000 % †During the current year, cash dividends amounting to $7,600 were declared and paid.

Wal Mart Stores Consolidated Income Statement (amounts in millions)

Year 4             Year 5             Year 6             Year 7

Sales Revenues                                               $83,412           $94,749           $106,146

Cost of Goods Sold                                        $65,586           $74,564           $83,663

Accounts Receivables             $ 690              $     900           $      853          $      845         

Inventories                              $11,014           $14,064           $15,989           $ 15,897                     

Question # 6

Please calculate the accounts receivable and inventory ratios for years 5 thru 7.

Question # 7

Does any of the inventory scenarios and interpretations that we discussed at the end of session 4 apply here?

Question # 8

Why does Wal Mart have such a big difference between its account receivable turnover ratios and inventory ratios? Does it have anything to do with the line of business it is active?

XYZ's stock price and dividend history are as follows:

An investor buys three shares of XYZ at the beginning of 2017, buys another two shares at the beginning of 2018, sells one share at the beginning of 2019, and sells all four remaining shares at the beginning of 2020.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answer to 2 decimal places. Do not round other calculations.)

b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2017, to January 1, 2020. If your calculator cannot calculate IRR, you will have to use trial and error or a spreadsheet program.) (Round your answers to 4 decimal places. Negative amount should be indicated by a minus si