A relative will support your education by paying you $500 a month for 50 months. If you can earn 7 percent on your money, what is this gift worth to you today?

Mariota Industries has sales of $310,720 and costs of $155,010. The company paid $24,710 in interest and $12,700 in dividends. It also increased retained earnings by $64,010 during the year. If the company’s depreciation was $15,680, what was its average tax rate?

Erna Company is expected to pay a dividend of $2.53 one year from today and $2.68 two years from today. The company’s sales in two years are expected to be $15,750,000. The company has a PS ratio of 1.71 times, and 524,500 shares outstanding. If the required return on the company’s stock is 11 percent, what is the current stock price?

A company has net working capital of $2,047, current assets of $6,375, equity of $22,035, and long-term debt of $10,475. What is the company’s net fixed assets?

You purchase a bond with an invoice price of $1,033. The bond has a coupon rate of 5.57 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. The par value is $1,000. What is the clean price of the bond?

An investor purchases a zero coupon bond with 17 years to maturity at a price of$393.51. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding.

A one-time gift to your college will provide $25,000 in scholarship funds next year with that amount increasing by 2 percent annually thereafter. If the discount rate is 5.5 percent, what is the current value of this perpetual gift?

Today, June 15, you want to buy a bond with a quoted price of 98.64. The bond pays interest on January 1 and July 1. Which one of the following prices represents your total cost of purchasing this bond today?

Two annuities have equal present values and an applicable discount rate of 7.25 percent. One annuity pays $2,500 on the first day of each year for 15 years. How much does the second annuity pay each year for 15 years if it pays at the end of each year?

Racing Motors wants to save $825,000 to buy some new equipment three years from now. The plan is to set aside an equal amount of money on the first day of each quarter starting today. How much does the company need to save each quarter to achieve its goal if it can earn 4.45 percent on its savings?