A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for 12 months. Using an annual interest rate of 10%, find the net present value (to you) of loaning your friend the money.

Q: Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment…

A: Given, Sales $3,600,000 EBIT is $150,000

Q: 24. A 10-years Treasury bond paying a 5% coupon annually is priced at USD 92.64. What is the yield…

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Q: Describe one type of systematic risk and one type of unsystematic risk and then explain how a…

A: Systematic risk is risk of market factors which cannot be diversified by business or investor. It is…

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Q: The beta of a market-neutral portfolio is zero.

A: Market Neutral: Market neutral refers to the type of investing technique that combines the short…

Q: Note that the first revenues and expenses will occur at the end of year 2. period. (a) Determine the…

A: Information Provided: Investment Cost = $20,000 (Year 0) Investment Cost = $10,000 (Year 1) Salvage…

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A: DCF is the valuation of an investment by using the cash flows for n period at discounted rates.…

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Q: culating EAR First National Bank charges 11.4 percent compounded monthly on its business loans.…

A: EAR is the annual effective rate of interest and that is interest rate considered after the impact…

Q: Motor City Rentals is trying to decide whether it should keep its existing car detailing machine or…

A: Capital budgeting techniques are used to understand if the investment decision will add value to the…

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A: Bankruptcy- This is a legal procedure of declaring either a person or a business as bankrupt and…

Q: An investor with a bond of par value $1,000 paying 5% coupon semi-annually will receive ________.…

A: The bond is a debt instrument in which a company receives a loan in the form of the bond price which…

Q: Which two of the following options correctly give rules for portfolio theory?   A) Portfolio…

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Q: What is fundamental analysis and where and when would it apply to a business decision.

A: A stock is known the share in a company which represents ownership in a company. The owners of the…

Q: USE THE FORMULA TO CALCULATE THE MONTHLY PAYMENT FOR THE FOLLOWING: ONLY LAST ONE NEEDS TO BE…

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A: Ann deposit (P) = 10,000 Interest rate (r) = 0.06   Mike deposit (X) = ? Interest rate (r1) = 0.08…

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A: Given, The Amount of cash flow received in year 5 is $1600 rate of interest is 8%

Q: Jones Corporation accepted a $25,000, 8%, 120-day note on July 8. Jones discounted the note on…

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Q: Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate…

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Q: Calculate the price of a $1,000, 5% bond with three years to maturity with 7.5% market interest…

A: The Price of Bond is calculated with the help of following formula  Price of Bond = Present Value of…

Q: What is the present value of $8,500 per year at a discount rate of 6.7 percent if the first payment…

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Q: 5. Audrey Sanders sells closet organization systems. She is paid a commission of 5.14% of her first…

A:

Q: 3. A company has preferred stock that can be sold for $27 per share. The preferred stock pays an…

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Q: Consider an amount of 25,000 in a fund today. October 25, 2022. DETERMINE ITS value on the specified…

A: Future Value = Present Value (1 + r)n where r = periodic interest rate = 3.42% n =time period =…

Q: Calculate the monthly payment for a 15 year mortgage of $100,000 at 6% interest.  Solve for PMT

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Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…

A: Given: Particulars Pan Elixir Rebound Cheers Think local Last year dividend $2.50 $0.50 $1.00…

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Q: sum of the present values of three payments of P 100,000 each which will occur at the end of 20, 40,…

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Q: USE THE FORMULA TO CALCULATE THE MONTHLY PAYMENT FOR THE FOLLOWING: AMOUNT BORROWED INTEREST RATE…

A:

Q: consider a 30 - year U.S. corporate bond with a 10% coupon rate. The current interest rate is 7…

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Q: a. What is the forward price of your contract? (Do not round intermediate calculation and round your…

A: Information Provided: Bond face value = $1000 1 year spot rate = 6% 11 year spot rate = 8%

Q: a. What effect would a $9.05 million operating expense have on this year's earnings? What effect…

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Q: An unlevered firm has a value of $700 million. An otherwise identical but levered firm has $160…

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A: Resource trade off helps in using the resources like time, money in a prudent manner.

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Q: Parts A and B Piscataway valves decided to pursue development of a new product line for natural gas…

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Q: Present and Future Values The present value of the following cash flow stream is $6,700 when…

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Q: Fujita, Incorporated, has no debt outstanding and a total market value of $222,000. Earnings before…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.