Hank purchased a car for $23,500 two years ago using a 4-year loan with an interest rate of 6.0 percent. He has decided that he would sell the car now, if he could get a price that would pay off the balance of his loan.   What’s the minimum price Hank would need to receive for his car? Calculate his monthly payments, then use those payments and the remaining time left to compute the present value (called balance) of the remaining loan. (Do not round intermediate calculations and round your final answer to 2 decimal places.) MINIMUM PRICE?

Q: Limited has a target capital structure of 45% debt, 15% preferred stock and 40% common equity. The…

A: Bonds are kind of debt and is the long term sources of capital for company and cost of debt is very…

Q: "Shareholder wealth" in a firm is represented by: f the market price per share of the firm's common…

A: The common stock represents the equity of the firm. The common shares provide the voting right and…

Q: RatePicker Co.'s bonds, issued 2 years ago, currently sell for $1,076. They have an annual coupa…

A: Yield to maturity of bond is rate of return realized on the bond when that is held till maturity and…

Q: Guelph Inc. would like you to assess the after-tax viability of a new machine using annual worth…

A: An annual worth analysis is a widely used technique for assessing the viability of an investment. It…

Q: Assume that Treasury bills (T-bills) yield 6% and the market risk premium is 7%. (a) What strategy…

A:

Q: Suppose the expected return on the tangent portfolio is 10% and its volatility is 40%. The risk-free…

A: The CML is a special case of Capital Allocation line where the risky portfolio is the market…

Q: Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred…

A: Weighted average cost of capital reflects the total cost of capital after considering the effect of…

Q: Q8 Which cash flow would you rather pay, $530 today or $700 in four years if interest rates are 8…

A: Present Value refers to a concept that states the discounted value or say value at today's time of…

Q: Determine the project's NPV if the Profitability Index is 0.4; and the investment value is $500,000.…

A: Net present value(NPV) of the project is calculated using following equation Profitability index =…

Q: Holtzman Clothiers's stock currently sells for $19.00 a share. It just paid a dividend of $2.50 a…

A: Compute the stock price at the end of year 1, using the equation as shown below: Stock price=Current…

Q: Assume that United Kingdom trade relationship. You are told that the British governme imposes quotas…

A: Exchange rates depends on the policies of central government and central banks can interfer in the…

Q: 771 APR = (1+) -1

A: Loans are paid by the monthly payment and they are charged on the basis of monthly interest rate but…

Q: Treadway is really having fun “get-ting stuff cheap” and wants to buyhis brother-in-law a car for…

A: We have to find the monthly lease payment, while all the terms of lease have been provided.

Q: SteelCo is an all-equity firm with a share price of R15 and 300 000 shares outstanding. The company…

A: formula to be used V=D/(1-Tc)-E/(1+r) where: V=Value of the firm D=Value of the firm's debt Tc…

Q: You are planning to issue debt to finance a new project. The project will require $19.95 million in…

A: The net present value (NPV) is the difference between the present value of cash inflows and outflows…

Q: 6. The equity shares of Techno Monto plc operating in Eastern Europe have a beta value of 0.90. The…

A: Required return on the shares of Techno Monto Plc is calculated using following equation Required…

Q: You lend a friend $50,000. Your friend will repay you in 6 equal annual end-of-year payments of…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: ur 13-year old cousin knows that you are in college and learning corporate finance. She is very…

A: There is concept in the finance and it is the time value of money and this is basic concept in the…

Q: A Freeze dryer is expected to cost RM19,000 two years from now and another RM12,000 four years from…

A: Concept. FV = PV ( 1+ r)n Where , FV = future value  PV = present value  r = interest rate n = time…

Q: ii. iii. Calculate the equivalent level effective rate of return over the four year-period. If…

A: Year Balance Return       2016 5000.00   2017 5175.00 3.5% 2018 5394.94 4.25% 2019 5705.15…

Q: NG COST. You are closing on a house. You have “Fair” credit (650 credit score) and as a result…

A: The mortgage loans are very common for buying house but the amount of loan you get and interest that…

Q: Sunshine Smoothies Company (SSC) manufactures and distributes smoothies. It is considering the…

A: Net present value (NPV):The net present value is a technique used for making the investment…

Q: Compute the present value of an $1,200 payment made in 9 years when the discount rate is 11 percent.…

A: Future value (FV) = $1,200 Discount rate (r) = 0.11 Period (n) = 9 years Present value = ?

Q: For each of the following annuities, find the best matching description (given that each answer…

A: Contingent annuity: An annuity paid over a variable number of periods is known as a contingent…

Q: Boris wants to save $93,000.00 for retirement. He already has $5,580.00, and he will make bi-weekly…

A: Required amount for retirement(FV)  $ 93,000.00 Current amount in account(PV)  $   5,580.00 Time…

Q: There are two companies manufacturing drones. Company A manufactures mass market drones, while…

A: Given Cost of Goods Sold for Company A =1870,000 Total Inventory - Ram Material 120000+Work in…

Q: a) What type of option is it (i.e., the term that indicates what the option holder has the right to…

A: discussed that equity can be thought of as an option for the firm. If this is true, answer the…

Q: Elana and Wiyot borrowed $41,000 at 8.54% compounded monthly as a second mortgage loan against their…

A: Mortgage loans are very common for purchasing the homes and it make the home purchase very easy…

Q: A 10-year, 8.00%, $4,000 bond that pays dividends quarterly can be purchased for $3,515. This means…

A: EAR The total interest rate an investor can earn in a given year after accounting for the effects of…

Q: By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest…

A: Formula used: PV @r%=1(1+r%)n

Q: n is the number of periods of an investment, PV is the starting value, FVn is the future value n…

A: We have to find the formula that depicts correctly the calculation of the return on an investment.

Q: Explain what is meant by the term 'factoring' for receivables and explain a typical financing…

A: Many small businesses find it difficult to secure funding for new initiatives as they wait for their…

Q: MV Corporation has debt with market value of $102 million, common equity with a book value of $96…

A: Market value of debt = $102 million Market value of preferred stock = $20 million Market value of…

Q: (a) Compute the​ family's monthly mortgage payment under this loan. ​(b) How much interest will the…

A: A mortgage loan allows the consumer to make payments towards house purchase at periodic intervals.…

Q: he financial activities of financial management are categorized into major functions in terms of…

A: Financial management is procurement , allocation and control of financial resources of a project. It…

Q: If your investment is growing at 20%, how would you calculate how long it would take to double in…

A: We have to set up the final step for the calculation of time taken for an investment to double up.

Q: The following table gives Foust Company's earnings per share for the last 10 years. The common…

A: Given: Year EPS   Year EPS 2012 $3.90   2017 $5.73 2013 $4.21   2018 $6.19 2014 $4.55…

Q: c)      Biotec has estimated the costs of debt and equity capital for various proportions of debt in…

A:

Q: A corporate bond with semi-annual interest payments has a yield to maturity of 6.05% and a current…

A: Solution:- Bond price means the price at which a bond is trading in the market. It is the summation…

Q: Fidelity Life Insurance has a document imaging system that needs replacement. A local salesperson…

A: Payback period is period required to recover initial investment in the projects based on the…

Q: Guelph Inc. would like you to assess the after-tax viability of a new machine using annual worth…

A: The annual worth analysis method is used to assess the viability of any asset by converting cash…

Q: 1. A French Investor buys AAPL stock at the beginning of the year for $150 dollars. He had Euros but…

A: Here the rates are quoted as USD.EUR.   This means that the value provided is value of 1 USD in Euro…

Q: You paid a premium of $1.47 for a call option on a common stock. The option has an exercise price of…

A: Solution:- Call option means right to buy the underlying asset at strike price, if at maturity the…

Q: is expected to return 20% percent in a boom, 10% percent in a normal economy, and lose 2 percent in…

A: Standard deviation is the measure of the total risk of the stock and it shows that how much the…

Q: Define "Present Value (PV)" Select one: O A. The process of computing PV is called discounting O B.…

A: Solution: Present value stands for the value calculated in today's terms.

Q: 1) Please indicate whether the following statements are true or false. In case of a false statement,…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: The common stock of Leaning Tower of Pita, Inc., a restaurant chain, will generate the following…

A: Expected Portfolio or the overall rate of return of Portfolio is the total return which is generated…

Q: Jackpot Amount Interest Rate Equal Annual Payments Present Value (in dollars) $15,000,000 7%…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: ABC company has issued a bond that is pays semi-annually at an annual coupon 1.75% and the risk…

A: Bonds are long term source of finance for government and companies and the yield on bond depends on…

Q: hich of the following would not be acceptable as a measure of basic investment risk? a)Expected…

A: Risk is always there when you invest in stock returns and risk is volatility of returns and change…

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.