Part A: Answer each of the following questions. Be sure to show all of your work and calculations.

question 18

Kendall Corners Inc. recently reported net income of $2.5 
million and depreciation of $275,000. What was its net cash flow? Assume it had no amortization 
expense.

Question 21

A company has an EPS of $1.60, a cash flow 
per share of $3.80, and a price/cash flow ratio of 7.0. What is its P/E ratio? 
Round your answer to two decimal places.


Question 22

Present 
and Future Values of Single Cash Flows for Different Periods


Find the 
following values using a financial calculator. Round your answers to the nearest 
cent. (Hint: Using a financial calculator, you can enter the known values and 
then press the appropriate key to find the unknown variable. Then, without 
clearing the TVM register, you can "override" the variable that changes by 
simply entering a new value for it and then pressing the key for the unknown 
variable to obtain the second answer. This procedure can be used in parts b and 
d, and in many other situations, to see how changes in input variables affect 
the output variable.)
a. An initial $200 compounded for 1 year at 7.3%. 
$ 

b. An initial $200 compounded for 2 years at 7.3%. 
$ 
c. The present 
value of $200 due in 1 year at a discount rate of 7.3%. 
$ 
d. The present 
value of $200 due in 2 years at a discount rate of 7.3%. 
$ 

Question 23 – 
preferred stock rates and return
What will be the nominal rate of return on a 
perpetual preferred stock with a $100 par value, a stated dividend of 11% of 
par, and a current market price of (a) $70, (b) $83, (c) $114, and (d) $131? 
Round the answers to two decimal places.
a.  % 
b.  % 
c.  % 
d. 



Question 25 – effective rates of interest
Find the interest rate 
(or rates of return) for each of the following situations. Round your answers to 
two decimal places.
a. You borrow $750 and promise to pay back $825 at the 
end of 1 year.
%
b. You lend $750 and receive a promise to be paid $825 at 
the end of 1 year. 
%
c. You borrow $85,000 and promise to pay back 
$353,135 at the end of 15 years.
%
d. You borrow $10,000 and promise to 
make payments of $2,445.7 at the end of each year for 5 
years.
%


Question 26 – statement of retained earnings

In 
its most recent financial statements, Newhouse Inc. reported $40 million of net 
income and $950 million of retained earnings. The previous retained earnings 
were $930 million. How much in dividends was paid to shareholders during the 
year?


password: shiv

AFTER PAYMENT ENTER PASSWORD : "SHIV" TO UNLOCK THE SOLUTION