Question 1:

Ace Chemical has revenues of $500,000 in 2015. Their total assets were $12,200,000 and their total equity was $3,500,000. Their net profit margin percentage was 10%.
What is the debt ratio for Ace? What is the return on assets? What is the debt to equity ratio?

Question 2:

In Time Value of Money, what are some of the implications of the time value of money in business? How do you see the time value of money having an impact on financial decisions made in your organization (or another organization, if you don’t see it in your own)?

Question 3:

Explain how intrinsic value is different than market value. Which of these approaches to asset valuation do you believe is most accurate? Which approach has billionaire investor Warren Buffet used?
How does accounting book value relate to market value? How does the difference illustrate the difference between accounting and finance?

Question 4:

Find a recent article in The Wall Street Journal relating to corporate social responsibility. Is good stewardship of resources and an attitude of social responsibility just good PR for a company, or are there other monetary and non-monetary returns as well? Give an example from your article of a company that is demonstrating corporate social responsibility. Are you impressed? Why or why not?

Question 5:

Western Inc. is evaluating some new capital expenditures. The capital will cost $750,000 and will be paid immediately (year 0). The capital will generate an incremental $100,000 in years 1 and 2. In years 3 through 7 it will generate an incremental $200,000 each year. The hurdle rate for Western is 20%. Based on TVM, would you approve this project? What if the hurdle rate was 10%?