Router
Assessment
Think Critically
16. Describe why the financial health of a company affects the way it can
respond to competition, problems, and opportunities. Should a company
try to maintain a large amount of unused capital and cash to be able
to respond to unanticipated circumstances? Why or why not?
17. How can a company be profitable but not have enough cash to meet
immediate financial obligations? Is it possible for a company to have a
large amount of cash on hand but not be profitable? Explain.
18. If you were the owner of a business and could choose the method of
financing growth, would you prefer to invest more of your own personal
money, attract additional investors, borrow money from creditors to
be repaid, or wait to make additional profits to reinvest in the business?
Analyze the advantages and disadvantages of each choice.
19. Prepare two written financial goals for a business and show how the
goals meet all of the characteristics of effective goals.
20. If you had to choose one of the three main financial statements to
learn about the overall financial health of a business, which would
you choose and why? If you wanted to learn about the current finan-
cial performance, which statement would be the most helpful? Why?
21. Describe why both inflation and interest rates should be considered by
a business when choosing among investments and when deciding
whether to borrow money to finance a major purchase.
Business Financial Calculations
Anal
Use the
Life, to
26. If you
hel
wo
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mo
fe
27. If
th
di
b
28. C
Po
Co
pul
CO
CR
in
tion from the table.
C
length of
investment
Compound
interest
C
b
22. Calculate the simple interest and compound interest earned for each
of the investments using the information from the table.
Amount Interest Compound
invested rate
$10,000 5.0
$150,000 6.5
$1,490,500 8.0
23. Use the information
re
a. The percentage lat
b. The percentage
c. The pe ilit
d. The p isse
24. A business ner
deliver 6,00
