### What interest rate are you being charged?

You borrow $125,000 and must make annual loan payments of $10,030.33 for 20 years, starting at the end of the year. What interest rate are you being charged? a. 6% b. 5% c. 3% d. 4% e. 2%

- Anthropology
- Art, Music, and Creative Writing
- Biology
- Business
- Chemistry
- Computer Science
- Drama, Film, and Mass Communication
- Earth Sciences
- Economics
- Education
- Engineering
- English Language and Literature
- Gender Studies
- Health Sciences
- History
- International Development
- Languages
- Law
- Mathematics
- Philosophy
- Physics
- Political Science
- Psychology
- Religious Studies
- Social Work
- Sociology
- Statistics

You borrow $125,000 and must make annual loan payments of $10,030.33 for 20 years, starting at the end of the year. What interest rate are you being charged? a. 6% b. 5% c. 3% d. 4% e. 2%

Federal Reserve Describe the history of the Federal Reserve System (the Fed), and not central banking in general. What makes the Fed unique among central banks? Include an explanation of all the tools the Fed uses to contract and expand the economy using money supply and interest rates. Your case should have an INTRODUCTI

The following information relates to the debt securities investments of Wildcat Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $300,000 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received 3. On July 1, 9%

The Welch Corporation is planning a zero coupon bond issue. The bond has a par value of $1000, matures in 10 years, and will be sold at an 80% discount, or for $200. The firm's marginal tax rate is 40%. What is the annual after-tax cost of debt to Welch on this issue? a) 10.48% b) 10% c) 11.62% d) 14.79% e) 17.46%

(Term Modification without Gain-Debtor's Entries) On December 31, 2007, the Firstar Bank enters into a debt restructuring agreement with Nicole Bradtke Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $2,000,000 note receivable by the following modifications: 1.

Rick and Stacy Stark, a married couple, are interested in purchasing their first boat. They have decided to borrow the boat's purchase price of $100,000. The family is in the 28% federal income tax bracket. There are two choices for the Stark family: they can borrow the money from the boat dealer at an annual interest rate of 8%

First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually. If you made a $38,000 deposit in each bank, you would earn $ ??? more from your Second City Bank account at the end of 7 years.

West Company had the following account balances at December 31, 2011 before recording bad debt expense for the year: Accounts receivable $900,000 Allowance for uncollectible accounts (credit balance) 16,000 Credit Sales for 2011 1,750,000 West is considering the following methods of estimating bad debts for

Under the assumption that Ideko's market share will increase by 0.5% per year, you determine that the plant will require an expansion in 2010. The cost of this expansion will be $15 million. Assuming the financing of the expansion will be delayed accordingly, calculate the projected interest payments and the amount of the proje

TropiKana Inc. has just borrowed 1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 7.00% per year and the Euro depreciates against the dollar from $1.15/ at the time the loan was made to $1.10/ at the end of the first year, how much interest and principal will TropiKana p

Raviv Industries has $100 million in cash that it can use for a share repurchase. Suppose instead Raviv invest funds in an account paying 10% interest for one year. a) If the corporate tax is 40%, how much additional cash will Raviv have at the end of the year of net of corporate taxes? b) If investors pay a 20% tax rate on ca

Enron hid debt in secret accounts. Johnson and Johnson removed all Tylenol from shelves when the integrity of the product was questioned. What business concept discussed in this course does this relate to?

What is wrong with the following argument: "If a firm issues debt that is risk free, because there is no possibility of default, the risk of the firm's equity does not change. Therefore, risk-free debt allows the firm to get the benefit of a low cost of capital of debt without raising its cost of capital of equity"?

Your firm currently has $100 million in debt outstanding with a10% interest rate. The terms of the loan require the firm to repay $25 million of the balance each year. Suppose that the marginal corporate tax rate is 40%, and that the interest tax shields have the same risk as the loan. What is the present value of the interest t

Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expecting in today's marketplace. He has looked up the rate paid on 3-month U.S. Treasury bills and found it to be 5.5%. He has decided to use the rate of change in the Consumer Price Index as a proxy for the

Why might an issuer seek to perfect his or her security interest in a piece of collateral? Is this a guarantee of payment? May the issuer take the collateral under any circumstance, and why might the issuer do this?

Two years ago your corporate treasurer purchased for the firm a 20-year bond at its par value of $1,000. The coupon rate on this security is 8 percent. Interest payments are made to bondholders once a year. Currently, bonds of this particular risk class are yielding investors 9 percent. A cash shortage has forced you to instruct

Thomson Engineering is issuing new 30-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% annual interest rate. However, with the warrants attached the bonds will pay an 8% annual coupon. There are 30 warrants attached to each bond, which have a par value of $1,000. What is

Zhao Automotive issues fixed-rate debt at a rate of 7.00%. Zhao agrees to an interest rate swap in which it pays LIBOR to Lee Financial and Lee pays 6.8% to Zhao. What is Zhao's resulting net payments? Net payment = Libor + .02% How would I calculate this with equations?

Warren Corporation's stock sells for $42 per share. The company wants to sell some 20-year, annual interest, $1,000 par value bonds. Each bond would have 75 warrants attached to it, each exercisable into one share of stock at an exercise price of $47. The firm's straight bonds yield 10%. Each warrant is expected to have a market

2. Which of the following bonds has the most interest rate risk and why? Which has the most reinvestment rate risk and why? a) A 5-year bond with a 9% annual coupon b) A 5-year bond with a zero coupon c) A 10-year bond with a 9% coupon d) A 10-year bond with a zero coupon.

Why do we need to use this shorthand so much in business?

A1. (Bond covenants) Dallas Instruments has a large bond issue whose covenants require: (1) that DI's interest coverage ratio exceeds 4.0; (2) that DI's ratio of tangible assets to long-term debt exceeds 1.50; and (3) that cumulative dividends and share repurchases not exceed 60% of cumulative earnings since the date of the issu

Perform an expanded analysis on the financial statements of Toyota Motors. Please use the most current financial statements available on www.sec.gov. Objectives: - Perform horizontal and vertical analysis, selected liquidity, profitability, and solvency ratios, and other selected financial ratios. - Complete an executi

Suppose that $1000 are deposited in an account paying 8% annual interest for 10 years. If $2000 had been deposited instead of $1000, would there be twice the money in the account after 10 years? Explain.

You are thinking of retiring. Your retirement plan will pay you either $250000 immediately on retirement or $350000 five yrs. after the date of retirement. Which alternative should you choose if the interest rate is a) 0% per yr b) 8% per yr c) 20% per yr

Determine due date & interest on notes: date of note face amount interest rate term of note a. oct.1 $10,500 8% 60 days b. aug.30 18,000

Suppose Bank One offers a risk free interest rate of 5.5% on both savings and loans and Bank ENN offers a risk free interest rate at 6% on both savings and loans. a) What arbitrage opportuity is available? b) Which bank would experience a surge in the demand for loan? Which bank would receive a surge in deposit. c) What wou

I am currently working on a research project on UK universities students' buried in debts. The main purpose of my research is to find out the causes, consequences, and solutions to universities' students who are in debts. First of all, I really need some suggestions on where I can find credible resources for my research, ther

On January 1, 2010, Crown Company sold property to Leary Company. There was no established exchange price for the property, and Leary gave Crown a $2,000,000 zero-interest-bearing note payable in five equal annual installments of $400,000, with the first payment due December 31, 2010. The prevailing rate of interest for a note o