The following payment plans are offered on the purchase of a new refrigerator. Plan A $375 cash Plan B 8 monthly payments of $55 Plan C $100 cash down and 6 monthly payments of $50. Which plan is the best if interest is 24% annually, compounded monthly for the buyer? And for the seller?
Figuring out the best plan to structure the rent payment for a new office building... Alternatives are: Plan A Annual payment of $15,000 at the end of each year. Plan B Monthly payments of $1,200 at the end of each month. Assuming an interest rate of 12% compounded monthly, which payment plan is better?
Investigate the data available from the Federal Reserve Board's http://www.federalreserve.gov/releases Using a Microsoft Word document, please answer the following questions: 1. What is the difference in the interest rates on commercial paper for financial firms versus non-financial firms? 2. What was the interest rate o
Interest and Semiannual Payments : A company borrows $75,000 which is to be repaid with equal payments semiannually for 10 years. The interest rate is 10%. Find the semiannual payments.
A company borrows $75,000 which is to be repaid with equal payments semiannually for 10 years. The interest rate is 10%. Find the semiannual payments. A. $3,750.00 B. $6,018.19 C. $4,125.00 D. $5,834.22
Compound Interest : How much should be invested at 8% compounded semiannually in order to have $5000 at the end of 8 years?
How much should be invested at 8% compounded semiannually in order to have $5000 at the end of 8 years? A. $4215.27 B. $9364.91 C. $2669.54 D. $3048.78
Find the interest rate for a simple interest loan with P=$1420, I=$306.72, t =3 years A. 7.2% B. 1.54% C. 6.5% D. 9%
1. The real risk-free rate of interest is 3 percent. Inflation is expected to be 4 percent this coming year, jump to 5 percent next year, and increase to 6 percent the year after (Year 3). According to the expectations theory, what should be the interest rate on 3-year, risk-free securities today?
Please see the attached file. --- Shady Lady sells window coverings to both commercial and residential customers. The following information relates to its budgeted operations for the current year. Commercial Residential Revenues $300,000 $480,000 Direct material costs $ 30,000
1. A firm needs $1 million in additional funds. These can be borrowed from a commercial bank with a loan at 6 percent for one year or from an insurance company at 9 percent for five years. The tax rate is 30 percent. A. What will be the firm's earnings under each alternative if earnings before interest and taxes (EBIT) are $
J. Ross and Sons Inc. has a target capital structure that calls for 40 percent debt, 10 percent preferred stock, and 50 percent common equity. The firm's current before?tax cost of debt is 10 percent, and it can sell as much debt as it wishes at this rate. The firm tax rate is 40 percent. The firm's preferred stock currently s
Please figure the following problem so I can understand how to figure interest: Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 14 percent interest. You would like to know the effective rate of interest for the following types of loans. (Each of the following parts stands alon
Corporation is evaluating the following four independent, investment opportunities: Project A, Cost $300,000, Rate of return 14% Project B, Cost $150,000, Rate of return 10% Project C, Cost $200,000, Rate of return 13% Project D, Cost $400,000, Rate of return 11% Jackson's target capital structure is 60 percent debt and 4
Corporate Finance : Interest Rate Formula K = R + [ (1.25 X (14 - R)] and Solving for Unknown Variables
I am working on corporate finance and figuring out interest rates. The problem has some of the givens, I need to find the value of the unidentified given. Other examples: 15% = R + [1.25 x (14% - R )] 16% = 9% + [1.10 x (k - 9%)] 15% = 10% + [b x (12.5% - 10%)]
I have completed the transaction worksheet but cannot get it to balance!! The credits and debits are given. I can't figure out if i'm not substracting something or is something is in the wrong column(?)-If I can't complete the transaction workwheet correctly, then the whole assignment with common-size percentages and other calcu
Two bonds have the following criteria: a. b. 6% coupon 13% coupon 11 yrs to maturity 11 years to maturity semi annual payments semi annual payments YTM 9.5% YTM 9.5% 1) If interest rates rise by 1%
See attached file for full problem description. --- ROE Georgia Electric reported the following income statement and balance sheet for the previous year: Balance sheet: Assets Liabilities & Equity Cash $ 100,000 Inventory 1,000,000 Accounts receivable 500,000 Current assets $1,600,000 Total debt $4,000,000
Select two banks in your area that offer debit cards on their checking accounts. Find the current interest rates and calculate the annual interest you would receive from each of these accounts on a deposit of $5000. If you cannot find checking accounts that offer interest on even that high of a deposit, then find out what inter
Most correct true statement 1. All else =, an increase in interest rates will have a greater effect on the prices of long term bonds than it will on the prices of short term bonds 2. All else =, an increase in interest rates will have a greater effect on higher coupon bonds 3 An increase in interest rates will have a
40. If it were evaluated with an interest rate of 0%, a 10 year regular annunity would have a present value of $3755.50. If the future (compounded) value of this annuity, evaluated a year 10, is $5,440.22, what effective annual interest rate must the analyst be using to find the future value 1. 7% 2. 8% 3. 9% 4. 10% 5. 1
19. The fact that a percentage of the interest income received by one corporation is excluded from taxable income has encouraged firms to use more debt financing relative to equity financing. True/False?
16. An investor with a six year investment horizon believes that interest rates are determined only by expectations about future interest rates. This investor should expect to earn the same rate of return over the 6 year time horizon if the investor buy a 6 year or a 3 year bond now and another 3 year bond three years from now.
Question #1 Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $150,000. The company can borrow $150,000 for three years at 10 percent annual interest or for one year at 8 percent annual interest. How much would Sauer Food Company save in interest over the three-
Please use attached format to answer questions. 1. Shock Electronics sells portable heaters for $25 per unit, and the variable cost to produce them is $17. Mr. Amps estimates that the fixed costs are $96,000. a. Compute the break-even point in units. b. Fill in the table below (in dollars) to illustrate that the break-e
Prepare entries to record issuance of bonds, payment of interest, and amortization of premium using the effective interest method.
On July 1, 2002, Imperial Oil Company issues $2,000,000 face value, 12%, 10-year bonds at $2,249,245. This price resulted in a 10% effective-interest rate on the bonds. Full problem is on the attached excel file
On 10/1/05, Astros Co lends $350,000 to the company batting practice pitcher at an annual interst rate of 7.2%. This act of graciousness will allow the batting practice pitcher to purchase a new spring training condominium. Terms of the loan require the batting practice pitcher to repay Astros Co with two hundred (200) equal m
An environmental testing company needs to purchase $40,000 worth of equipment 2 years from now. At an interest rate of 20% per year, compounded quarterly, the present worth of the equipment is closest to? A. $27,070 B. $27,800 C. $26,450 D. $28,220
AN INTEREST RATE OF 2% PER MONTH IS THE SAME AS: A. 24% PER YEAR B. A NOMINAL 24% PER YEAR, COMPOUNDED MONTHLY ???? C. AN EFFECTIVE 24% PER YEAR, COMPOUNDED MONTHLY ??? D. BOTH ''A'' and ''B''
Solve this problem: With a loan amount of $174,154 and an APR of 8.275% and a term of 28 yrs (paid monthly): 1) Calculate the amount of interest paid. 2) Calculate the amount of interest saved by making extra payments in increments of $50 (from $50 - $1000) 3) MAIN QUESTION: calculate the amount where the maximum i
The formula for the amount due on a loan is A= P (1+(r/m))^(mt) Now in the question the time in years (t) is 6 years 9 months. P= $17500 r=0.085 How do I write the time(t) in the equation? Also, what if the time was 4 years 3 months, how would I write that for the time in years (t)? Also, what does semiannually, mon
The question is: Find the amount due on each compound interest loan. $7500 at 6.5% for 8 years 6 months if the interest is compounded: a. Annually b. Quarterly c. Weekly I know the formula is A=P(1+(r/m))^(mt) but my question is, how do i write the ''8 years 6 months'' as my time (t)?