Sophia __ Welcome.pdf - Score 10/12 You passed this...

This preview shows page 1 - 4 out of 10 pages.

UNIT 1 — MILESTONE 11Lucie has $6,000 in her savings account, $1,400 in her checking account, and $30,000 in a long-term investment such as a brokerage account. She owns a house worth$150,000 and cars that are valued at $25,000. She owes $4,000 in credit card debt and $120,000 as mortgage. Lucie has an outstanding payment of $60,000 on her studentand car loans. She has a retirement plan worth $75,000.Using the given information, calculate Lucie's net worth, current ratio, and debt ratio.Lucie has a net worth of −$106,600. Her current ratio is 1.5 and debt ratio is 15%.Lucie has a net worth of −$106,600. Her current ratio is 9.35 and current ratio is 158%.Lucie has a net worth of $103,400. Her current ratio is 1.85 and debt ratio is 64%.Lucie has a net worth of −$103,400. Her current ratio is 0.5 and her debt ratio is 156%.Score10/12You passed this Milestone10questions were answeredcorrectly.2questions were answeredincorrectly.
The formulas that can be used to calculate net worth, current ratio, and debt ratio are as follows:Net worth = Assets − Liabilities = $287,400 − $184,000Net worth = $103,400Current ratio = Monetary assets / Current liabilitiesCurrent ratio = $7,400 / $4,000 = 1.85Debt ratio = Total liabilities / Total assets * 100Debt ratio = ($184,000 / $287,400) * 100 = 64%CONCEPTBalance Sheets2Preethi plans to buy a house within the next 5 years. At present, she has total savings of $60,000. The median house price in her state is nearly $100,000.Which of the following investment options will Preethi most likely benefit from?
RATIONALEPreethi should invest $60,000 at 10% interest for a period of 5 years. To calculate the most beneficial investment from these options, we will use the formula to calculate thefuture value of the invested money at different interest rates and different periods.
By substituting the numbers in the equation, we getTherefore, this investment is the most beneficial for Preethi.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 10 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
professor_unknown
Tags
Debt, Lucie

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture