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1. Argosy FIN 401 Module 1 Assignment 3 Ratio
Analysis (100% Score)
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By monday, February 23, 2015 solve the problem
below, calculate the ratios, interpret the results
against the industry average, and fill in the table
on the worksheet. Then, provide an analysis of
how those results can be used by the business to
improve its performance.
Balance Sheet as of December 31, 2010
Gary and Company
Cash $45 Accounts payables $45
Receivables 66 Notes
payables 45

2. Inventory 159 Other current
liabilities 21
Marketable securities 33 Total
current liabilities $111
Total current assets $303
Net fixed assets 147 Long Term
Liabilities
Total Assets $450 Long-term
debt 24
Total Liabilities $135
Owners Equity
Common stock $114
Retained earnings 201
Total stockholders’ equity 315
Total liabilities and equity $450
Income Statement Year 2010

3. Net sales $795
Cost of goods sold 660
Gross profit 135
Selling expenses 73.5
Depreciation 12
EBIT 49.5
Interest expense 4.5
EBT 45
Taxes (40%) 18
Net income 27
1. Calculate the following ratios AND interpret the
result against the industry average:
Ratio Your Answer Industry
Average Your Interpretation
(Good-Fair-Low-Poor)

4. Profit margin on sales 3%
Return on assets 9%
Receivable turnover 16X
Inventory turnover 10X
Fixed asset turnover 2X
Total asset turnover 3X
Current ratio 2X
Quick ratio 1.5X
Times interest earned 7X
2. Analysis:
Give your interpretation of what the ratios
calculations show and how the business can use
this information to improve its performance.
Justify all answers.
Highlight your answers.
Receivable turnover requires the use of credit
sales. Since you are not given this number please
use the sales figure of 795.

5. I am pasting the required form for you to
complete, as a reminder. Remember to show me
your work. You can put the calculations at the end
of your paper. If these are not included I will have
to count the answer wrong.
Ratio Your Answer Industry
Average Your Interpretation
(Good-Fair-Low-Poor)
Profit margin on sales 3%
Return on assets 9%
Receivable turnover 1.6X
Inventory turnover 10X
Fixed asset turnover 2X
Total asset turnover 3X
Current ratio 2X
Quick ratio 1.5X

6. Argosy FIN 401 Module 2 Assignment 2 Cash
Management (100 Score)
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Norma’s Cat Food of Shell Knob ships cat food
throughout the country. Norma has determined
that through the establishment of local collection
centers around the country, she can speed up the
collection of payments by two and one-half days.
Furthermore, the cash management department of
her bank has indicated to her that she can defer
her payments on her accounts by one-half day
without affecting suppliers. The bank has a remote
disbursement center in Iowa.
a.If the company has $5 million per day in
collections and $3 million per day in

7. disbursements, how many dollars will the cash
management system free up? Justify your answers.
b.If the company can earn 8 percent per annum on
freed-up funds, how much will the income be?
Justify your answers.
c.If the annual cost of the new system is $800,000,
should it be implemented? Explain why or why
not.

8. Argosy FIN 401 Module 3 Assignment 2 LASA 1 The
Time Value of Money (100 Score)
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Mary has been working for a university for almost
25 years and is now approaching retirement. She
wants to address several financial issues before
her retirement and has asked you to help her
resolve the situations below. Her assignment to
you is to provide a 4-5 page report, addressing
each of the following issues separately. You are to
show all your calculations and provide a detailed
explanation for each issue.
Issue A:

9. For the last 19 years, Mary has been depositing
$500 in her savings account , which has earned 5%
per year, compounded annually and is expected to
continue paying that amount. Mary will make one
more $500 deposit one year from today. If Mary
closes the account right after she makes the last
deposit, how much will this account be worth at
that time?
Issue B:
Mary has been working at the university for 25
years, with an excellent record of service. As a
result, the board wants to reward her with a bonus
to her retirement package. They are offering her
$75,000 a year for 20 years, starting one year from
her retirement date and each year for 19 years
after that date. Mary would prefer a one-time
payment the day after she retires. What would this
amount be if the appropriate interest rate is 7%?
Issue C:
Mary’sreplacement is unexpectedly hired away by
another school, and Mary is asked to stay in her
position for another three years. The board
assumes the bonus should stay the same, but Mary
knows the present value of her bonus will change.

10. What would be the present value of her deferred
annuity?
Issue D:
Mary wants to help pay for her granddaughter
Beth’s education. She has decided to pay for half of
the tuition costs at State University, which are now
$11,000 per year. Tuition is expected to increase
at a rate of 7% per year into the foreseeable
future. Beth just had her 12th birthday. Beth plans
to start college on her 18th birthday and finish in
four years. Mary will make a deposit today and
continue making deposits each year until Beth
starts college. The account will earn 4% interest,
compounded annually. How much must Mary’s
deposits be each year in order to pay half of Beth’s
tuition at the beginning of each school each year?

11. Argosy FIN 401 Module 4 Assignment 2 The
Weighted Average Cost of Capital (100 Score)
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Coogly Company is attempting to identify its
weighted average cost of capital for the coming
year and has hired you to answer some questions
they have about the process. They have asked you
to present this information in a PowerPoint
presentation to the company’s management team.
The company would like for you to keep your
presentation to approximately 10 slides and use
the notes section in PowerPoint to clarify your
point. Your presentation should address the
following questions and offer a final
recommendation to Coogly. Make sure you support
your answers and clearly explain the advantages
and disadvantages of utilizing the weighted

12. average cost of capital methodology. Include at
least one graph or chart in your presentation.
Company Information
The capital structure for the firm will be
maintained and is now 10% preferred stock, 30%
debt, and 60% new common stock. No retained
earnings are available. The marginal tax rate for
the firm is 40%.
Coogly has outstanding preferred stock That pays
a dividend of $4 per share and sells for $82 per
share, with a floatation cost of $6 per share. What
is the component cost for Coogly's preferred
stock? What are the advantages and disadvantages
of using preferred stock in the capital structure?
If the company issues new common stock, it will
sell for $50 per share with a floatation cost of $9
per share. The last dividend paid was $3.80 and
this dividend is expected to grow at a rate of 7%
for the foreseeable future. What is the cost of new
equity to the firm? What are the advantages and
disadvantages of issuing new equity in the capital
structure?
The company will use new bonds for any capital
project, according to the capital structure. These
bonds will have a market and par value of $1000,

13. with a coupon rate of 6% and a floatation cost of
7%. The bonds will mature in 20 years and no
other debt will be used for any new investments.
What is the cost of new debt? What are the
advantages and disadvantages of issuing new debt
in the capital structure?
Given the component costs identified above and
the capital structure for the firm, what is the
weighted average cost of capital for Coogly? What
are the advantages and disadvantages of using this
method in the capital budgeting process?

14. Argosy FIN 401 Module 5 Assignment 1 LASA 2 The
Capital Budgeting Decision (100 Score)
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As a financial consultant, you have contracted with
Wheel Industries to evaluate their procedures
involving the evaluation of long term investment
opportunities. You have agreed to provide a
detailed report illustrating the use of several
techniques for evaluating capital projects
including the weighted average cost of capital to
the firm, the anticipated cash flows for the
projects, and the methods used for project
selection. In addition, you have been asked to
evaluate two projects, incorporating risk into the
calculations.

15. You have also agreed to provide an 8-10 page
report, in good form, with detailed explanation of
your methodology, findings, and
recommendations.
Company Information
Wheel Industries is considering a three-year
expansion project, Project A. The project requires
an initial investment of $1.5 million. The project
will use the straight-line depreciation method. The
project has no salvage value. It is estimated that
the project will generate additional revenues of
$1.2 million per year before tax and has additional
annual costs of $600,000. The Marginal Tax rate is
35%.
Required:
1. Wheel has just paid a dividend of $2.50 per
share. The dividends are expected to grow at a
constant rate of six percent per year forever. If the
stock is currently selling for $50 per share with a
10% flotation cost, what is the cost of new equity
for the firm? What are the advantages and
disadvantages of using this type of financing for
the firm?

16. 2. The firm is considering using debt in its
capital structure. If the market rate of 5% is
appropriate for debt of this kind, what is the after
tax cost of debt for the company? What are the
advantages and disadvantages of using this type of
financing for the firm?
3. The firm has decided on a capital structure
consisting of 30% debt and 70% new common
stock. Calculate the WACC and explain how it is
used in the capital budgeting process.
4. Calculate the after tax cash flows for the
project for each year. Explain the methods used in
your calculations.
5. If the discount rate were 6 percent
calculate the NPV of the project. Is this an
economically acceptable project to undertake?
Why or why not?
6. Now calculate the IRR for the project. Is
this an acceptable project? Why or why not? Is
there a conflict between your answer to part C?
Explain why or why not?
Wheel has two other possible investment
opportunities, which are mutually exclusive, and
independent of Investment A above. Both

17. investments will cost $120,000 and have a life of 6
years. The after tax cash flows are expected to be
the same over the six year life for both projects,
and the probabilities for each year's after tax cash
flow is given in the table below.
Investment B Investment C
Probability After Tax
Cash Flow Probability After Tax
Cash Flow
0.25 $20,000 0.30 $22,000
0.50 32,000 0.50 40,000
0.25 40,000 0.20 50,000
7. What is the expected value of each project’s
annual after tax cash flow? Justify your answers
and identify any conflicts between the IRR and the
NPV and explain why these conflicts may occur.
8. Assuming that the appropriate discount
rate for projects of this risk level is 8%, what is the
risk-adjusted NPV for each project? Which project,

18. if either, should be selected? Justify your
conclusions.