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1. C.F. Lee Inc. has the following income statement. How much after tax operating income does the firm have? Show your work to get full credit. (8pts) Sales $3,100.00 Costs $1,850.00 Depreciation 192.00 _______________________ EBIT $1,058.00 Interest Expense 285.00 _______________________ EBT $773.00 Taxes(35%) 270.55 ________________________ Net Income $502.45 2. Amit Patel is planning to invest $10,000 in a bank certificate of deposit (CD) for five years. The CD will pay interest of 9%. What is the future value of Amits investment? Show your work. (5pts) 3. What is the purpose of using common size balance sheets and common size income statements? 23. You purchased the stock of Sargent Motors at a price of $75.75 one year ago today. If you sell the stock today for $89.00, what is your holding period return? a. 35% b. 17.5% c. 12.5% d. 25% 6. Megn Gaumer expects to need $50,000 as a down payment on a house in six years. How much does she need to invest today in an account paying 7.25 percent? Show your work. (6pts 4. Using the following information for McDonovan, Incs stock, calculate their expected return and standard deviation. Show your work. (10pts) State Probability Return Boom 20% 40% Normal 60% 15% Recession 20% (-20%) 17. Which of the following best represents cash flow to investors? a. Cash flow from operating activities, plus cash flow generated from net working capital b. Earnings before interest and taxes times 1 minus the firms tax rate c. Net income minus dividends paid to preferred stockholders. d. Cashflow from operating activity minus cash flow invested in net working capital minus cash flow invested in long-term assets.

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