Problem $1$ Financial Statements

Merced Inc.

$2022$ and $2023$ Partial Balance Sheets

Assets Liabilities and Owners$$ Equity

$2022202320222023$

Current assets $$2000$ $$4000$ Current Liab.s $$1000$ $$2000$

Net fixed assets $20,00024,000$ L$/$T Debt $8,00010,000$

Owners$$ Equity $13,00016,000$

Total Assets $22,00028,000$ Total D $+$ OE $22,00028,000$

Merced Inc.

$2023$ Income Statement

Sales $$20,000$

Costs $10,000$

Depreciation $2,000$

EBIT $8,000$

Interest Paid $2,000$

EBT $6,000$

Taxes $(40$ percent$)2,400$

Net Income $3,600$

Dividends $=1600$

Additions to Ret Earn. $=2000$

Problem $2$ Financial Statement

:

Yosemite Enterprises

$2023$ Partial Balance Sheet Information

Assets Liabilities and Owners$$ Equity

Current assets $$2000$ Current Liab.s $$1000$

Net fixed assets $12,000$ L$/$T Debt $5,000$

OE

Total Assets $14,000$ Total D $+$ OE $\_\_\_\_\_\_$

Problem $5.($Compounding Periods.$)$

Part A$.$ A bank quotes an APR on its $5-$year cd$$s of $12$ percent. If these returns are compounded BI$-$MONTHLY $($m$=6$ times a year$),$ what is the EAR $($effective annual rate$)?$

Group of answer choices

$12\mathrm{.}00$ percent

$12\mathrm{.}50$ percent

$12\mathrm{.}62$ percent

$12\mathrm{.}75$ percent

$12\mathrm{.}87$ percent