**Price: $4.99**

**Problem 1. Creighton Company's balance sheet and income statement are provided below**

Creighton COmpany

Balance Sheet

December 31, 2012

Cash 21,000

Accounts receivable 24,000

and so on

Required:

1) Compute the margin, turnover, and return on investment for Creighton Company

2) What is the advantage of expanding the ROI formula to measure margin and turnover separately?

**Problem 2. Delta Company is evaluating two different capital investments, Project X and Y. Either X or**Y would cost $100,000, and the company cannot afford to do both. The company expects that Project X would provide net cash inflows of $30,000 per year for 5 years. For Project Y, the net cash inflows are expected to be as follows:

Year 1 $22,000

Year 2, 24,000

Year 3, 30,000

Year 4, 38,000

Year 5, 40,000

Required:

1) Calculate the present value index for Project X and for Project Y.

2) Indicate whether each of the projects is an acceptable investment.

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