Need help with Financial Management and the New York State Lottery

  1. (7 points) Against the odds, you won the New York State Lottery. The jackpot was advertised as $40 million. As the winner, you are entitled to payments of $2 million at the beginning of each year for 20 years ($2 million x 20 years = $40 million).

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    1. If you know that you can earn 5% on your savings per year, how much is the lottery prize worth to you?

    1. They offer you $25 million to take the prize now. Do you take the $25 million one-time payout?



Using the provided NORTH CAROLINA PERFORMING ARTS CENTER AT CHARLOTTE FOUNDATION (referred to as NCPAC) Financial Statements for the Years Ended August 31, 2014 and June 30, 2013 answer the following questions:

  1. (4 points) Who performed the audit? What was their opinion? What does this type of opinion mean?

  2. (2 points) For which revenue or support line item, would a 10% decline create the greatest financial problem for NCPAC? Why?

  3. (3 points) Calculate the ratio of program expenses to total expenses for 2014 and 2013.  Does this seem reasonable?

  4. (1 point) In 2014 NCPAC shows a substantial increase in operating revenue. Does this nearly 20% increase in revenue and support translate into substantially better financial results? Why?

  5. (10 points) Create a table of common sized assets and liabilities for the statement of financial position.

  6. (14 points) Calculate the following ratios: current, quick, days of cash on hand, receivables turnover, average collection period, fixed asset turnover, total asset turnover, debt, debt to equity, times-interest earned, operating margin, total margin, ROA, RONA

  7. (3 points) Is there anything that you see in the other portions of the financial statements (Notes, Statement of Cash Flows, etc.) that may be of concern?

  8. (8 points) Write a memo that reflects your evaluation of the financial status of NCPAC.  In the conclusion, please provide a recommendation to management on the next steps.