accounting question

1. Advanced Financial Statement Analysis:

The financial statements of XYZ Corp. show the following information for the year ending December 31, 2023:

– Net Income: $1,500,000

– Average Total Assets: $10,000,000

– Average Shareholders’ Equity: $4,000,000

– Average Number of Outstanding Shares: 500,000

Calculate the following financial ratios:

– Return on Assets (ROA)

– Return on Equity (ROE)

– Earnings per Share (EPS)

2. Time Value of Money in Accounting:

A company is considering two investment opportunities. Investment A requires an initial cash outflow of $50,000 and is expected to generate cash inflows of $20,000 per year for the next 5 years. Investment B requires an initial cash outflow of $80,000 and is expected to generate cash inflows of $25,000 per year for the next 4 years.

If the company’s discount rate is 8%, calculate the Net Present Value (NPV) for each investment and recommend which investment the company should undertake.

3. Consolidated Financial Statements:

Company P owns 80% of Company S. The financial statements for each company are as follows:

Company P:

– Net Income: $2,000,000

– Total Assets: $15,000,000

Company S:

– Net Income: $800,000

– Total Assets: $8,000,000