Case 1: Victor and Maria Hernandez Analyze Their Financial Statements

Victor and Maria Hernandez spent some time making up their first balance sheet, which is shown in Table 2.3. Using the data in their balance sheet, complete the following calculations and interpret the results

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1. Victor and Maria are a bit confused about how various financial activities can affect their net worth. Assume that their home is now appraised at $192,000 and the value of their automobile dropped to $9500. Calculate and characterize the impact of these changes on their net worth. See Table 2.3.


2. If Victor and Maria take out a bank loan for $1545 and pay off their credit card debts totaling $1545, what impact would this have on their net worth? See Table 2.3.


3. If Victor and Maria see their New York 2016 bond and put cash into their savings account, what effects would this have on their net worth and their basic liquidity ratio. See Table 2.3.


   

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