Assignment Exercise 11–1: Liquidity Ratios Refer to the Metropolis Health System (MHS) case study in Chapter 28. Required 1. Set up a worksheet for the liquidity ratios. 2. Compute the four liquidity ratios using the Chapter 28 MHS financial statements. Assignment Exercise 11–2: Solvency Ratios Refer to the Metropolis Health System (MHS) case study in Chapter 28. Required 1. Set up a worksheet for the liquidity ratios. 2. Compute the solvency ratios using the Chapter 28 MHS financial statements. Assignment Exercise 11–3: Profitability Ratios Refer to the Metropolis Health System (MHS) case study in Chapter 28. Required 1. Set up a worksheet for the liquidity ratios. 2. Compute the profitability ratios using the Chapter 28 MHS financial statements. Assignment Exercise 12–1: Unadjusted Rate of Return Metropolis Health Systems’ Laboratory Director expects to purchase a new piece of equipment. The assumptions for the transaction are as follows: • Average annual net income = $70,000 • Original investment amount = $410,000 • Unrecovered asset cost at the end of useful life (salvage value) = $41,000 Required 1. Compute the unadjusted rate of return using the original investment amount. 2. Compute the unadjusted rate of return using the average investment method. Assignment Exercise 12–2: Finding the Future Value (with a Compound Interest Table) John Whitten is one of the physicians on staff at Metropolis Health System. His practice is six years old. He has set up an office savings account to accumulate the funds to replace equipment in his practice. Today John is trying to figure what his equipment fund will amount to in four more years. The equipment fund savings account presently has a balance of $63,500 and any interest earned over the next four years will be left in the account. John assumes the annual interest rate will be 5%. How much money will be in the account at the end of four more years? Required Compute how much money will be in the account at the end of four more years. (Use the compound interest table found in Appendix 12-B.) Assignment Exercise 12–3: Finding the Present Value (with a Present-Value Table) Part 1—Dr. John Whitten is still figuring out his equipment fund. According to his calculations he needs $250,000 to be accumulated six years from now. John is now trying to find the present value of the $250,000. He continues to assume an interest rate of 5%. Required Compute the present value of $250,000 accumulated fifteen years from now. Assume an interest rate of 5%. (Use the Present-Value Table found in Appendix 12-A at the back of this chapter.) Part 2—John doesn’t like the answer he gets. What if he can raise the interest rate to 7%? How much difference would that make? Assignment Exercise 12–3: Finding the Present Value (with a Present-Value Table) Part 1—Dr. John Whitten is still figuring out his equipment fund. According to his calculations he needs $250,000 to be accumulated six years from now. John is now trying to find the present value of the $250,000. He continues to assume an interest rate of 5%. Required Compute the present value of $250,000 accumulated fifteen years from now. Assume an interest rate of 5%. (Use the Present-Value Table found in Appendix 12-A at the back of this chapter.) Part 2—John doesn’t like the answer he gets. What if he can raise the interest rate to 7%? How much difference would that make? Assignment Exercise 12–4 : Computing an Internal Rate of Return Dr. Whitten has decided to purchase equipment that has a cost of $60,000 and will produce a pretax net cash inflow of $30,000 per year over its estimated useful life of six years. The equipment will have no salvage value and will be depreciated by the straight-line method. The tax rate is 50%. Determine Dr. Whitten’s approximate after-tax internal rate of return. Assignment Exercise 12–5 : Payback Period The MHS Chief Financial Officer is considering alternate proposals for the hospital Radiology department. The Dir…

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