College of Administrative and Financial Sciences
Assignment 1
Principles of Finance (FIN101)
Deadline for students: (2/10/2022@ 23:59)
| Course Name: Principles of Finance | Student’s Name: |
| Course Code: FIN101 | Student’s ID Number: |
| Semester: 1st | CRN: |
| Academic Year: 1444/1445 H, Second Semester | |
For Instructor’s Use only
| Instructor’s Name: Munira Almajed | |
| Students’ Grade: | Level of Marks: High/Mid/Low |
Instructions – PLEASE READ THEM CAREFULLY
- This assignment is an individual
- The Assignment must be submitted only in WORD format via the allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented. This also includes filling in your information on the cover page.
- Students must mention question numbers clearly in their answers.
- Late submitted assignments will NOT be entertained.
- Avoid plagiarism; the work should be in your own words; copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answered must be typed using Times New Roman (size 12, double-spaced) No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions: (Marks: 15)
- A company had cash and marketable securities worth $200,000 accounts payables worth $51,000, inventory of $1,501,500, accounts receivables of $5,288,128, short-term notes payable worth $220,000, other current liabilities of 100,000, and other current assets of $121,800. Calculate the company net working capital and describe how managers manage the firm working capital. (2 Marks)
- Your parents have given you $1,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in a bank CD that pays 7% interest. You know that the trip costs $1600 right now and that inflation for the year is predicted to be 3%. Will you have enough money in a year to purchase the trip? Show your calculations. (2 Marks)
- If the following financial information related to XYZ Company. Total Revenues last year $970, depreciation expenses $50, costs of goods sold $450, and interest expenses $55. At the end of the year, current assets were $121 and current liabilities were $107. The company has an average tax rate of 35%. Calculate the net income for XYZ Company by setting up an income statement. (2 Marks)
- Calculate the common-size balance sheet from the following information for the company: (2 Marks)
- ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned on this investment? (2 Marks)
- You have just won a lottery that promises an annual payment of $120000 beginning immediately. You will receive a total of 15 payments. If you can invest the cash flow in an investment that is paying 8% annually, what is the present value of this annuity? (2 Marks)
- XXX company has forecast a rate of return of 20% if the economy booms (30% probability); a rate of return of 19% if the economy in in a growth phase (40% probability); a rate of return of 2.50% if the economy in in decline (20% probability); and a rate of return of -10% if the economy in a depression (10% probability). What is the company standard deviation of returns? (3 Marks)
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