A web page designer purchases a car for $18,395. The sales tax is 6.5% of the purchase price, car license fee is 1.2% of the purchase price and the designer makes a $2500 down payment. Assuming the designer gets the loan at an annual interest rate of 7.5% for 4 years, determine the monthly car payment. (answer in whole number)
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- Your County has asked you to analyze the purchase of some dump trucks. Each truck wil cost $45,000 and have an operating and maintaining cost that starts at $15,000 the first year and increases by $ 2,000 per year. Assume the salvage value at the end of year is $9,000 and the interest rate is 12%. Estimate the equivalent annual cost of each truck.An airline studied the data from their passenger records and noted that their customers turn up only about 95% of the time. A flight can accommodate 40 passengers and each seat costs 4,000 Php. Suppose each passenger books a ticket independently and the airline decides to sell 42 tickets for the flight. If more than 40 show up for the flight , then the extra passengers will be compensated PhP10,000 for rebooking and other expenses. 5. If Profit = Ticket sales-Compensation of Bumped passenger(s). What is the profit if 42 customers show up?A certain medical device will result in an estimated $15,000 reduction in hospital labor expenses during its first year of operation. Labor expenses (and thus savings) are projected to increase at a rate of 7% per year after the first year. Additional operating expenses for the device (maintenance, electric power, etc.) are $3,500 annually, and they increase by $250 per year there after (i.e., $3,750 in year two and so on). It is anticipated that the device will last for 10 years and will have no market value at that time. If theMARR is 10 % per year, how much can the hospital afford to pay for this device? Use an Excel spreadsheet in your solution.
- Capital Budgeting with Taxes (Non-MACRS Depreciation); Sensitivity Analysis GravinaCompany is planning to spend $6,000 for a machine that it will depreciate on a straight-line basisover 10 years with no salvage value. The machine will generate additional cash revenues of $1,200 ayear. Gravina will incur no additional costs except for depreciation. Its income tax rate is 35%. Thepresent value annuity factor for 15%, 10 years (from Appendix C, Table 2) is 5.019.Required1. What is the payback period of the proposed investment (in years, and rounded to 1 decimal place) underthe assumption that the cash inflows occur evenly throughout the year?2. What is the accounting (book) rate of return (ARR) based on the initial investment outlay? Round youranswer to 1 decimal place (e.g., 13.571% = 13.6%).1. Timothy received $100 for his birthday. He wants to buy either a new skateboard or a new mp3 player to listen to music while working out but he can buy only one. a. Which core principle is represented in this scenario above (if any). b. give an xplanation.Carl’s house payment is $1,100 per month and his car payment is $466 per month. If Carl's take-home pay is $2,950 per month, what percentage does Carl spend on his home and car? Loan payments-to-income ratio
- Aurillo Equipment Company (AEC) projected that its ROE for next year would be just 6 percent.However, the financial staff has determined that the firm can increase its ROE by refinancing somehigh interest bonds currently outstanding. The firm’s total debt will remain at $200,000 and the debtratio will hold constant at 80 percent, but the interest rate on the refinanced debt will be 10 percent.The rate on the old debt is 14 percent. Refinancing will not affect sales, which are projected to be$300,000. EBIT will be 11 percent of sales and the firm’s tax rate is 40 percent. If AEC refinances itshigh interest bonds, what will be its projected new ROE?Jasmine owns 12 apartment buildings in a college town, which it rents exclusively to students. Each apartment building contains 120 rental units, but the owner is having cash flow problems due to an average vacancy rate of nearly 50 percent. The apartments in each building have comparable floor plans, but some buildings are closer to campus than others. Jasmine’s accumulated data from last year on the number of apartments rented, the rental price (in dollars), and the amount spent on advertising (in hundreds of dollars) at each of the 12 apartments are available below. These data, along with the distance (in miles) from each apartment building to campus, are presented below. Jasmine is looking for expert advice on the available data to inform administrative and business policy. By applying this scenario, help her regress the quantity demanded of her apartments on price, advertising, and distance datasets by using Excel or SPSS. Observation or (Number of Apartments) Quantity…A suburban lawn service bought 10 new mowers at $3300 each. The company made a $5000 down payment and financed the balance at an annual rate of 10% with monthly payments for 4 years. Use Calculator BII. The amount of interest for the second payment period is The portion of the third payment that is applied to reduction of the principal is The principal remaining at the end of the fourth payment period is The total interest paid in the first five periods is
- One item a computer store sells is supplied by a vendor who handles only that item. Demand forthat item recently changed, and the store manager must determine when to replenish it. The managerwants a probability of at least 96 percent of not having a stockout during lead time. The managerexpects demand to average a dozen units a day and have a standard deviation of two units a day.Lead time is variable, averaging four days with a standard deviation of one day. Assume normalityand that seasonality is not a factor.a. When should the manager reorder to achieve the desired probability?b. Why might the model not be appropriate if seasonality were present?A newspaper has 500,000 subscribers who pay $4 per month for the paper. It costs the company $200,000 to bill all its customers. Assume that the company can earn interest at a rate of 20% per year on all revenues. Determine how often the newspaper should bill its customers. (Hint: Look at unpaid subscriptions as the inventoried good.)Philip Neilson owns a fireworks store. Philip's fixed costs are $17,000 a month, and each fireworks assortment he sells costs, on average, $14. The average selling price for an assortment is $39. Suppose Philip decides to expand his business. His new fixed expenses will be $27,500, but the average cost for a fireworks assortment will fall to just $6 due to Philip's higher purchase volumes. What is the new break-even point?