Question

1) RevCo has total assets of $346,200, net fixed assets of $277,400, current liabilities of $16,100, and long-term liabilities of $324,600. What is RevCo's total debt ratio? A) .98 B) .78 C) .67 D) .51 E) .14

2) Mint Ltd has sales of $938,300, cost of goods sold of $764,500, and inventory of $223,600. How long on average does it take the firm to sell its inventory? A) 101.75 days B) 4.68 days C) 159.01 days D) 16.40 days E) 106.75 days

3) Jordan just deposited $13,000 into his savings account at Traditions Bank. The bank will pay .87 percent interest, compounded annually, on this account. How much interest will he earn over the next 7 years?

A) $752.10

B) $812.67

C) $714.87

D) $737.12

E) $735.05

Answer 1

1)	Debt To Asset Ratio = Total Debt / Total Assets
	=($16100+324600)/346200
	= $340700/346200
	=0.98
2)	Inventory Turnover Ratio = Cost of goods sold / average inventory
	= $764500/223600
	=3.42 times
	Days sales in inventory = 365/ inventory turnover ratio
	= 365 days /3.4190518783542
	=106.75 days
3)	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	= $13000*( 1+0.009)^7
	=13000*1.06251
	= $13812.67
	Interest earned = $13812.67-13000
	=$812.67