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Interest Rates and the Cost of Debt

Interest rates

If I have a home loan for $224,000.00 at a 8% variable monthly interest rate for 30 years what is my monthly payments and can you show me how you got it? Also suppose I had to move within in one year and the interest payments over the first year were $17,852, would it be better to rent the property if it would cost me $1400.0

Calculating Return at Different Bank Compounds

Suppose you deposit $10,000 dollars for 2 years at a rate of 10%. calculate the return (A) if the bank compounds annually (n = 1) Round your answer to the hundredth's place. Now calculate the return (A) if the bank compounds quarterly (n=4). Now calculate the return (A) if the bank compounds monthly (n=12). Now calculate th

Minicase - George Hedderwick Executive Fruit

Prepare a 700-1,050 word response for this Mini-case: You will need to follow all assumptions in the Mini-case precisely and carefully to complete the following: a. Identify the steps necessary to financially plan and forecast for 2005, 2006, and 2007, b. Project future years using the growth rate assumptions

Important Information about Cash interest

The Ness Company sells $5,000,000 of five-year, 10% bonds at the start of the year. The bonds have an effective yield of 9%. Present value factors are below: 10% 9% PV factor 1 year 0.90909 0.91743 PV factor 2 years 0.82645 0.84168 PV factor 3 years 0.75131 0.77218 PV factor 4 years 0.

Word Problem

An old lady known to you as "Granny" has been evaluating an investment proposal from her son, Uncle Sal. Sal suggests that the investment is "too good to pass up," but based on past performance, Granny is suspicious. After doing some research, Granny has determined that Sal's investment has a high risk of default, for which sh

Greg Miller wants to buy a new automobile...

Greg Miller wants to buy a new automobile. The dealer has the exact car Greg wants, and has given Greg two payments options: (1) pay the full cash price of $19,326 today, or (2) pay only $2,000 down today and then make four more annual payments of $5,000 each beginning one year from today. Greg doesn't have the cash needed t

Total amount that parker should recorded as "bad debt expense"

The following information is available for the Parker Company: Credit sales during 2005 $100,000 Allowance for doubtful accounts at December 31, 2004 1,200 Account receivable deemed worthless and written off during 2005 1,600 During 2005 Parker estimated that its bad debt expense should be 1% of all credit sales. As

Financing Operations Problems

(See attached files for full problem descriptions) 17 problems all together. The first 12 are multiple choice. Problems 13 through 17 are short answer problems. Pages 8-10 are four tables at the end that may help. Please show all computations, clearly labeled. Please send this to me in a Word document. The entire thing

What was the annual interest rate?

A business invests $10,000 in a savings account for two years. At the beginning of the second year, an additional $3500 is invested. At the end of the second year, the account balance is $15,569.75. What was the annual interest rate? keywords: solving, solve, evaluate, evaluating, finding, find

Future Value of a Bond Fund

Bob has a rich uncle who wishes to help with his education. He will invest in a bond fund paying 4% compounded semi-annually and maturing in 18 years. How much should he invest if he wants the value of his bond fund to be worth $85,000 when it matures? _____ ?

A child's grandparents purchased a bond fund

A child's grandparents purchased a $10,000 bond fund maturing in 18 years to be used for her college education. The bond fund pays 4% compounded semi-annually. How much will the bond fund be worth at maturity?

Warrants: Exercise Value of Warrants, Price of Warrants, Effect of different factors (life, variability, growth rate of stock price, dividend policy) on warrant's price, coupon interest rate on the bonds with warrants that the company wishes to sell.

Maese Industries Inc. has warrants outstanding that permit holders to purchase 1 share per warrant at a price of $25. a. Calculate the exercise value of the firm's warrants if the common sells at each of the following prices: (1) $20, (2) $25, (3) 30, (4) $100. (Hint: A warrant's exercise value is the difference between the s

Compound Interest and Appraised Value of Property

I borrowed 33 1/3 percent of the appraised value to purchase a comercial property. The lender charged me interest at the rate of 11% per annum. My interest for the first ayear amounted to 5,315.51. What was the appraised value of the property and how did you get it?

Principal and interest payment computations

Cal owes $10,000 now, a lender will carry the debt for five more years at 10 percent interest. In this particular case, the amount owed will go up by 10 percent per year for 5 years. The lender then will require that Cal pay off the loan over the next 12 years at 11 percent interest. What will his annual payment be? 2) I

Principles of Finance

(See attached file for full problem description) --- Rollins Corporation has a target capital structure consisting of 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Assume the firm has insufficient retained earnings to fund the equity portion of its capital budget. Its bonds have a 12 percent cou

Loans and compensating balances

# 22 page 233 Columbus shipping co is negotiating with 2 banks for a 100,000 loan. Bankcorp of Ohio requires a 20 percent compensating balance, discounts the loan, and wants to be paid back in four quarterly payments. Cleveland bank requires a 10 percent compensating balance does not discount the loan but wants to be paid b

Foreign Exchange Help

Question # 10: If the interest rate in the United Kingdom is 8% the interest rate in the US is 10%, the spot exchange rate is $1.75/£ and interest rate parity holds, what must the one-year forward exchange rate? Question # 11 Suppose all of the conditions in question 10 hold except that the forward rate of exchange i

Effective annual rates, value of the preferred stock

1) Bank A offers to lend me the required funds on a loan in which interest must be paid monthly, and the quoted rate is 8 percent. Bank B will charged 9 percent, with interest due at the end of the year. What is the difference in the effective annual rates charged by the two banks? 2) A corporation is growing at a constant r

4-12: Noncontrolling interest

David Company acquired 60 percent of Mark Company for $300,000 when Mark's book value was $400,000. On that date, Mark had equipment (with a 10-year life) that was undervalued in the financial records by $60,000. Also, buildings (with a 20-year life) were undervalued by $40,000. Two years later, the following figures are reporte

What interest rate does the bond offer?

A zero coupon bond which will pay $1,000 in ten years is selling today for $422.41. What interest rate does the bond offer? Lenny loanshark charges 1% per week on his loans. What APR must he report to consumers? Assume exactly 52 weeks in a year. What is the effective annual rate? If you take out an 8,000 ca

Stock Buy Back Decision on a Zero Growth Firm

An short analysis (sheet) needs to be prepared using excel to decide whether the proposal should be accepted or rejected. --- You have the following data on Joe's Corporation: EBIT: $1,000,000 Tax rate: 40% Cost of equity: 10% Joe's is a zero growth firm, and is currently financed entirely with equit

Terms of sale-effective annual interest rate

A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if: a. The discount is changed to 2 percent. b. The credit period is increased to 45 days. c. The discoun

Types of Debt - Pier 1

Use the Pier 1 Imports' financial statements to answer the following questions: To obtain Pier 1 Imports' financial statements you can go to www.Pier1.com and click on the link at the bottom of the first page titled Investor's Relations and then choose Annual Reports and Proxy Statements. 1. Does Pier 1 have a significant

Index and Interest Rate Futures

Can you please provide me with brief response to my questions noted below Stock Index Futures How are stock index futures used? How are stock index futures priced? What is basis convergence? How do you hedge with stock index futures? Fundamentals of Interest Rate Futures What are T-bills and Eurodollars, and wh