Blog

Q1 (1.5 marks)Ahlam Company’s net income for the year 2000, is $3,700,214. The company had an EBITDA of $ 10,125,300, and its depreciation and amortization expense was equal to $2,543,790. The company’s average tax rate is 35 percent. a. What is the amount of interest expenses for the firm? (Show the details of your calculations).b. Prepare a common sized Income Statement if net sales equal $12,000,000.Q2. (1 Mark)The following are accounts balance (in thousands) for Malak Company. CalculateNet Income after-tax(show intermediate steps) t=35% for the year ended December 31, 2020. Net property and equipment$ 2,000Accounts receivable$3,000Notes payable$37,000Revenues $ 983,000Supply expenses$ 255,000Depreciation expenses$ 35,000Labor expense$300,000Interest Expenses$11,000Stockholders’ Equity$61,500Cash & cash equivalents$97,000Long-term debt$3,500Q3. Calculate the following ratios from the Balance Sheet and the Income Statement given below: (1.5 Mark)

a. Current Ratiob. Debt Ratioc. Fixed asset turnoverd. Total asset turnovere. Operating profit marginBalance Sheet:Cash30,000Acct/Rec72,500Inventories50,000 Current assets152,500Net fixed assets240,000 Total assets392,500Accts/Pay44,500Accrued expenses31,000Short-term N/P9,500 Current liabilities85,000Long-term debt110,000Owner’s equity197,500 Total liabilities and ownersequity392,500Income Statement:Net sales450,000COGS220,000 Gross profit230,000Operating expenses128,000 Net operating income102,000Interest expense18,500 EBT83,500Income taxes33,000 Net income50,500Q4.Using the values below, answer the questions that follow: (1mark)Amount of annuity: $500Interest rate: 9%N=10 yearsa) Calculate the future value of the annuity, assuming that it is(1) An ordinary annuity. (2) An annuity due. b) Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity—ordinary or annuity due—is preferable as an investment? Explain why.