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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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- Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.Kenzie purchased a new 3-D printer for $450,000. Although this printer is expected to last for ten years, Kenzie knows the technology will become old quickly and so she plans to replace this printer in three years. At that point, Kenzie believes she will be able to sell the printer for $30,000. Calculate yearly depreciation using the double-declining-balance method.Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?
- A man buys a motorcycle. There will be no maintenance cost the first year as the motorcycle is sold with 1 year free maintenance. The 2nd year the maintenance is estimated at P2000. In subsequent years, the maintenance cost will increase by P2000 per year. How much would need to be set aside now at 5% interest to pay the maintenance costs of the motorcycle for the first 6 years of ownership?The owner of a ski resort estimates that a new 4-person ski lift will cost $4,000.000. The owner begins making payments on March 1 and every three r nonths thereafter for 5 years into an account inat earns 5% annual interest compounded quarterly. What payment amount must the owner make to have the cost of the ski lift in 5 years? (Round your answer to the nearest cent.)A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is replaced, the newmachine will cost $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the newmachine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine? Choose the closest answer. Solve, (a) $22,371 (b) $50,628 (c) $7,371 (d) −$1,000 Machine A was purchased three years ago for $10,000 and had an estimated MV of $1,000 at the end of its 10-year life. Annual operating costs are $1,000. The machine will perform satisfactorily for the next sevenyears. A salesperson for another company is offering Machine B for $50,000 with an MV of $5,000 after 10 years. Annual operating costs will be $600. Machine A could be sold now for $7,000, andMARR is 12% per year. Use…
- In order to purchase another truck, Beatty Transport recently obtained a $125,000 loan for five years at 7.8% compounded semiannually. a. What are the monthly payments on the loan? b. The company is considering selling the truck at the end of 3 years and paying off the balance of the loan. What should the monthly payments be so that the value of loan at the end of the first 3 years is $55,000?A businessman bought a building, but the thermal insulation of the roof is not adequate. It was determined that with 6 '' of insulating foam it is possible to reduce the cost of heating by $ 1,500 and air conditioning by $ 2,000 per month. Assuming that the first six months of the year is winter and the next six months are summer, calculate the maximum price of the repair if the building is expected to be maintained for 2 years. The interest rate is 1.5% per month. please put the digramA land surveyor just starting in private practice needs a van to carry crew and equipment. He can lease a used van for $8000 per year, paid at the beginning of each year, in which case maintenance is provided. Alternatively, he can buy a used van for $16,000 and pay for maintenance himself. He expects to keep the van for 3 years, at which time he would sell it for an anticipated $3500. Given a MARR of 6%, what is the most the surveyor should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it?
- A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is replaced, the new machine will cost $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the newmachine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine? Choose the closest answer. Solve, (a) $22,371 (b) $50,628 (c) $7,371 (d) −$1,000 Machine A was purchased three years ago for $10,000 and had an estimated MV of $1,000 at the end of its 10-year life. Annual operating costs are $1,000. The machine will perform satisfactorily for the next seven years. A salesperson for another company is offering Machine B for $50,000 with an MV of $5,000 after 10 years. Annual operating costs will be $600. Machine A could be sold now for $7,000, andMARR is 12% per year.…Ms. Susan is renovating her townhouse for a total price of $18,000. The work will be done in a month and she will start to rent the house to Mr. Sam with a monthly rental of $1,200. For how long time (in months) can Ms. Susan can break even from the renovation cost? (Complete the analysis in MS Excel Sheet and copy your analysis and answer here). Assume: • The annual maintenance cost is approximately $1,200. • Ms. Susan covers utility and electric bills which are approximately $150 every month. • The interest rate is 0.5%. • Present Value = Future Value/(1+i)^nMeg O’Byte wants to buy a new computer for her business for Internetaccess on a cable modem. The computer system cost is $5,100. The cablecompany charges $200 (including the cable modem) for installation and hasa $50 a month usage fee for businesses, paid at the end of the month. Megexpects to buy the system with a $100 down payment, financing the balanceat 8 percent over the next 4 years. She will sell the computer for $1,000when she upgrades. She expects a $500 a month increase in cash flow and isin the 25 percent tax bracket.a. The start-up costs are __________________.b. The PVC is __________________.c. The PVB is __________________.d. The monthly payment for the computer is __________________.
