7/29/2019 Exam 2 Spring 2010

1/19

IMPORTANT: SAVE THIS SPREADSHEET TO THE DESKTOP OF THE

COMPUTER YOU ARE USING WITH YOUR NAME IN THE FILENAME.

RESAVE IT OFTEN WHILE YOU ARE WORKING ON IT.

NOTHING SHOULD BE USED OR ACCESSED BY YOU DURING THIS

TEST EXCEPT THE COMPUTER YOU ARE USING AND THIS FILE, ANDBLACKBOARD WHEN YOU SUBMIT YOUR COMPLETED EXAM.

YOU MAY NOT ACCESS THE INTERNET OTHER THAN TO SUBMITYOUR COMPLETED EXAM IN BLACKBOARD. YOU MAY ACCESSEXCEL'S HELP SYSTEM.

VIDEO SURVEILLANCE IS ACTIVE.

There are 6 tabbed pages in this exam spreadsheet including this one.

The last page is currently blank.

Points are shown on each tab. Partial credit will be given where possible.

Points on this portion sum to 80. There is also a 25 point objective portion of the test

that you will take in BlackBoard.

When you have completed this exam spreadsheet:

Save it one last time to the desktop of your computer.

Log in to BlackBoard

Go to this course in the My Courses menu

Click on Control Panel

Click on Digital DropBoxClick on SEND FILE (not ADD FILE)

Use the BROWSE button and navigate to the file you saved on the desktop.

Click the SUBMIT button to submit your exam.

Then go to COURSE DOCUMENTS in BlackBoard and take the 25-point

objective question portion of this exam.

Check with Dr. Hawley before you leave to be sure that your

exam was received.

7/29/2019 Exam 2 Spring 2010

2/19

INPUTS:

Amount of Loan: $250,000

Term of loan in years 2

Annual Interest Rate on Loan: 9.50%

Balloon Payment $50,000

Payment Frequency

Payment

Number

Payment Interest Principal Balance

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

INSTRUCTIONS:

Use the space beginning in Row 28 to create an amoritzation table model that will work for ANY ALLOWAB

User-changeable inputs are in red. Create restrictions on the input cells that prevent users from entering v

allowed.

The amount of the loan must be a positive number.The balloon payment must be a positive number or zero and must be less than the amount of the loan.

The term of the loan can be 1, 2, 3, 4, or 5 years.

The interest rate can be between 5% and 15%.

The payment frequency can be annual, quarterly, or monthly. Use a drop-down list in Cell F24 with "Annu

"Monthly" as the choices. Use the results from that cell to set the payment frequency for computation in t

Each row in your table should show the monthly payment, the interest portion of that payment, the princi

payment, and the balance immediately following that payment for all payments within the term of the loa

are beyond the term of the loan should show nothing (be blank) except for the payment number. All value

positive numbers or zero.

7/29/2019 Exam 2 Spring 2010

3/19

18

19

20

21

22

23

2425

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

4546

47

48

49

50

51

52

53

54

55

5657

58

59

60

7/29/2019 Exam 2 Spring 2010

4/19

LE values of the inputs.

alues that are not

l", "Quarterly" and

he table.

pal portion of that

n. Rows in the table that

s in the table should be

7/29/2019 Exam 2 Spring 2010

5/19

7/29/2019 Exam 2 Spring 2010

6/19

1

2

3

5

7/29/2019 Exam 2 Spring 2010

7/19

Nominal Annual Interest Rate 10.50%

Effective

AnnualRate

Annual Compounding

Quarterly Compounding

Monthly Compounding

Daily Compounding

Continous Compounding

INSTRUCTIONS:

Create forumulas in cells D7 to D11

compute the effective annual inter

the nominal rate input in D3 and th

compounding frequencies .

7/29/2019 Exam 2 Spring 2010

8/19

that

est rates for

e listed

7/29/2019 Exam 2 Spring 2010

9/19

Loan Amount 85,000$ Required regular p

Term in Years 10 not including the s

Annual Interest Rate 10.5%

Supplemental Monthly Payment 500$ Number of payme

off the loan with t

supplemental pa

Difference betwee

amount of intere

of the loan with t

and the dollar amwill be paid over t

the regular and s

are made every m

Instructions:

The inputs below represent a loan with monthly payments. The loan will have

required monthly payment, but the borrower can pay more than the required

The input for the supplemental monthly payment is the additional amount tha

paid each month that the loan is in effect.

Create a formula that computes the number of payments that will be needed t

the loan if the supplemental monthly payment is made throughout the life of t

Also create whatever formulas are necessary to compute the difference betwe

total dollar amount of interest that would have been paid on the loan if only th

required payments were made and the total dollar amount of interest that will

if the supplemental monthly payment is made every month.

7/29/2019 Exam 2 Spring 2010

10/19

ayment on the loan

pplemental payment

ts needed to pay

he regular and

ments made every month

n the total dollar

t paid over this life

e regular payment

ount of interest thathe life of the loan if

pplemental payments

onth.

payment.

will be

o pay off

he loan.

en the

e

be paid

7/29/2019 Exam 2 Spring 2010

11/19

Each question on this page counts 3 points.

1. Consider the following annual cash flows, each to be received at the end of

a year.

Year Payment

1 2,000$

7/29/2019 Exam 2 Spring 2010

12/19

7

8 5,000$

7/29/2019 Exam 2 Spring 2010

13/19

6

7

8

9

10

In the green cell below, create a formala that extrapolates the linear trend from the5. 5 years of sales and uses it to estimate 2010 sales.

Year Sales

2005 1,685,000$

2006 1,925,000$

2007 2,542,000$

2008 2,246,000$

2009 3,625,000$

2010

7/29/2019 Exam 2 Spring 2010

14/19

7/29/2019 Exam 2 Spring 2010

15/19

Sales CGS EBIT Net Income

2500 1800 300 125

3000 2200 315 150

3250 2400 325 162

4000 3100 400 200

4500 3300 430 225

7/29/2019 Exam 2 Spring 2010

16/19

5200 3900 450 260

5900 4400 500 295

6500 4800 550 325

8000 6000 590 400

9250 6900 700 475

7/29/2019 Exam 2 Spring 2010

17/19

Percent Change in Sales from 2009 5.000%

Interest Rate on Short Term Notes Payable 6.000%

Interest Rate on Long Term Debt 8.500%Tax Rate for 2010 35.0%

Common Stock Dividend for 2010 $30,000

Expected addition to Plant and Equipment in 2010 $150,000

Additional depreciation on new Plant/Equip in 2010 $20,000

2008 2009 2010

Sales 3,514,000 3,795,120

Cost of Goods Sold 2,284,100 2,656,584Gross Profit 1,229,900 1,138,536

Selling and G&A Expenses 350,000 325,000

Fixed Expenses 120,000 125,000 110,000

Depreciation Expense 30,000 32,500

EBIT 729,900 656,036

Interest Expense 56,000 62,900

Earnings Before Taxes 673,900 593,136

Income Statement

INPUTS

You need forecast the 2010 pro forma income statement and balance sheet for the firm whose 2008 a

income statements and balance sheets are given here. Inputs are provided for most items in the Input

below.

The cost of goods sold in 2010 is expected to change with sales by 110% of the two-year arithmetic av

the proportion of this item in relation to sales for 2008 and 2009. Selling and G&A Expenses, Accounts

receivable, Inventory, and Accounts Payable are expected to change with sales at 100% of the two-ye

arithmetic average of their percentage of sales for 2008 and 2009. The firm has planned an investmen

$150,000 in new equipment in 2010. This equipment will be depreciated at $20,000 per year. Depreci

existing Plant/Equipment will be the same as it was in 2009. Interest expense for 2010 is computed on

2009 ending balances in Short Term Notes Payable and Long Term Debt. Inputs for those interest rates

provided in the Inputs section.

Complete the pro-forma income statement and balance sheet for 2010 using the information above, t

inputs below, and the values that are given in the statements. The 2010 projected statements should

accurately adjust for any changes in the inputs.

Compute the excess or deficit of financing for 2010 in the yellow box at the bottom of the Balance Shenumber should be positive if the firm will have more financing than is needed, and it should be negati

firm has less financing than is needed.

7/29/2019 Exam 2 Spring 2010

18/19

Taxes 235,800 207,600

Net Income 438,100 385,536

Assets 2008 2009 2010

Cash and Equivalents 52,000 98,036 98,036

Accounts Receivable 406,000 520,000Inventory 854,000 875,000

Total Current Assets 1,312,000 1,493,036

Plant & Equipment 429,000 580,000

Accumulated Depreciation 126,000 158,500

Net Fixed Assets 303,000 421,500

Total Assets 1,615,000 1,914,536

Liabilities and Owner's Equity

Accounts Payable 130,000 180,000

Short-term Notes Payable 179,000 210,000 210,000

Other Current Liabilities 118,000 85,000 85,000Total Current Liabilities 427,000 475,000

Long-term Debt 614,000 500,000 500,000

Total Liabilities 1,041,000 975,000

Common Stock 395,000 395,000 395,000

Retained Earnings 179,000 544,536

Total Shareholder's Equity 574,000 939,536

Total Liabilities and Owner's Equity 1,615,000 1,914,536

Excess/(Deficit) Financing for 2010

Balance Sheet

7/29/2019 Exam 2 Spring 2010

19/19

nd 2009

s section

erage of

r

t of

ation on

the

are

he

et. Thise if the