PLEASE SHOW WORK THANKS What is the present value of a S100

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What is the present value of a S100 lump sum to be received in 5 years if the opportunity cost rate is 10 percent? (4 points) 1) 2) What is the future value of a $100 lump sum invested for 5 years in an account paying 6.9 percent interest? (4 3) What is the future value of a $250 lump sum invested for 5 years in an account paying 7.890 percent interest? 4) ABC Nursing Home borrows $150,000 for 9 months at 2.75 percent annual interest rate. How much interest Points) (4 Points) will ABC Nursing Home pay for the loan? (6 Points) 5) ABZ Clinic makes a $350 purchase with a 2-10 net 30 provision. What is the effective annual interest rate if the clinic pays on day 11? On day 30? (6 Points) 6) Based on the information below, determine the Current Ratio for this facility and identify how this ratio compares to Optum (2017) for audited financial statements from 2015. (6 Points)

Solution

1) Future Value (FV) 100 No of years (n) 5 Rate (r\') 10% Present Value = FV/(1+r)^n = 100/((1+0.1)^-5) =                                                            62.09 2) Present Value (PV) 100 No of years (n) 5 Rate (r\') 6.90% Future Value (FV)= PV*(1+r)^n = 100*(1+0.069)^5 = 139.60 3) Present Value (PV) 250 No of years (n) 5 Rate (r\') 7.80% Future Value (FV)= PV*(1+r)^n = 250*(1+0.078)^5 =                                                          363.94 4) Loan Amount (PV)                                                 150,000.00 No of months 9 Rate 2.75 per annum Interest = Loan Amount * Rate /12*9 = 150000*2.75%/12*9 = 3093.75 5) Total Pay Period 11 Discount Period 10 Discount % 2% Effective Annual Interest Rate = (Discount% / (100% – Discount%)) * (360 / (total pay period – discount period)) = (0.02/(1-0.02))*(360/(11-10)) = 7.346938776 or 734.69% Total Pay Period 30 Discount Period 10 Discount % 2% Effective Annual Interest Rate = (Discount% / (100% – Discount%)) * (360 / (total pay period – discount period)) = (0.02/(1-0.02))*(360/(30-10)) = 0.367346939 36.73% 6 2014 2015 Current Assets 975 676 Current Liabilities 549 371 Current Ratio = Current Assets/Current Liabilities Current Ratio = 975/549 676/371 =                                                              1.78           1.82 Current Ratio for 2015 has increased to 1.82 from 1.78. This means for every $1 dollar of current liabilities the company has $1.82 of current asset to cover it Increase in current ratio means increase in capacity of the company to pay off its liabilties