Keisha is taking out an amortized loan for s85,000 to open a small business and is deciding between the offers from two lenders. She wants to know which one would be the better deal over the life of the small business loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) An online lending company has offered her a 10-year small business loan at an annual interest rate of 9.3%. Find the monthly payment. (b) A bank has offered her a 8-year small business loan at an annual interest rate of 9.3%. Find the monthly payment. (©) Suppose Keisha pays the monthly payment each month for the full term. Which lender's small business loan would have the lowest total amount to pay off, and by how much? Online lending company The total amount paid would be $ less than to the bank. O Bank The total amount paid would be $ less than to the online lending company.
Q: ( :). ( 26 + a За + 2b Consider two assets with returns: rı = b r2 = in two states. - a a + 26 Calcu...
A: r1 = 2b+ab-a r2 = 3a+2ba+2b Portfolio return r = 4-6 2 units for first asset and -1 units of second ...
Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You hav...
A: Given: Particulars Amount Amount Amount Amount Years (NPER) 10 10 10 10 Interest rate(Assume)...
Q: A project has the following cash flows. What is the internal rate of return? Years Cash flow -$46.80...
A: Solution:- Internal Rate of Return (IRR) is the rate of return which the bank is yielding. At IRR, N...
Q: which of the following entities would relative valuation be appropriate? a.) a cooperative b.) a p...
A: To assess a firm's financial worth, a relative valuation model compares its value to that of its riv...
Q: a. Discuss two technical points that can affect short selling. b. Do your own research on ASX. What ...
A: a) Short selling occurs when an investor borrows a security and sells it on the open market with the...
Q: Ayush Power Limited has reported a net profit of 6 crore, 7.5 crore and 3 crore for the financial ye...
A: According to section 135 of the companies act 2013 every company whose: i) Net worth is Rs 500 cr. o...
Q: The manked pice of a bicyele So00-andl the selling paice 3 Gaco/-Whoatis the diseunt bieycde? CATION...
A: Cash Discount: Cash Discount is the discount provided by the sellers to encourage buyers to make pa...
Q: Mr. Reyes borrows P600, 000 at 12% compound the loan in 15 equal annual payments. How muc unpaid aft...
A: Loans are paid by the periodic payments that are paid equally annually and they carry payment of int...
Q: Clark Industries has 200 million shares outstanding, a current share price of $30, and no debt. Clar...
A: Total Number of shares outstanding are 200 million Share price is $30 Cash in hand or distributable ...
Q: If accountants use straight-line depreciation, determine the function which describes the book value...
A: The method of allocating the cost of a non current asset over its useful life is called depreciation...
Q: Kala wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 4.8% int...
A: Here, Interest rate = 4.8% compounded annually Future value of annuity = $5,000 Time period = 3 year...
Q: ) The time is progressed by using the event count method.
A: Event count method is the process of measure the no. Of discrete events over period of time.
Q: A family wishes to buy a $235,900 home. - If a conventional lender is willing to loan the family 87...
A: Federal housing administration loan helps people with a moderate income to get a mortgage loan for a...
Q: (a) The size of the quarterly payment is S. (Round the final answer to the nearest cent as needed. R...
A: Amortization Schedule: It represents a table consisting of the periodic loan payments, interest pay...
Q: Holly Homeowner bought a bungalow for $50,000 twenty years ago with a $20,000 down payment. The mont...
A: Annual effective percentage rate is the actual annual return earned by an investor on the asset sold...
Q: a. What is this investment's internal rate of return? IRR = % Do all %3D
A: Internal rate of return (IRR) of an alternative refers to the rate at which the Net present value (N...
Q: Galvanized Products is considering purchasing a new computer system for their enterprise data manage...
A: 1. Computation of loan amount. Amount of loan = 100000 × 25% = 25000 Loan including interest = 25000...
Q: Please explain why this is the formula. Problem to this solution: Suppose the yield on a 10-year T-...
A: MRP stands for Maturity Risk Premium. It is the extra returns required by the investors for keeping ...
Q: Answer the following probiems: 1. The buyer of a car pays P 169,000 cash and P 12,000 every month fo...
A: Solution:- Cash price means the amount payable in today’s terms. So, cash price = Down payment + Pre...
Q: Consider a bond with a coupon of 5.8 percent, eleven years to maturity, and a current price of $1,06...
A: Given: Particulars Amount Face value(FV) $1,000 Coupon 5.80% Current price(PV) $1,060.10 ...
Q: pare general journal entries for the following: Feb 1, 2024 - Purchased and retired 400 common share...
A: Basic Journal entry is the part of business finance.
Q: If Maria wants to be a millionaire ($1,000,000) by the time she retires (45 years from now), how muc...
A: Future value (FV) = $1,000,000 Interest rate = 8% Semi annual interest rate (r) = 8%/2 = 4% Period =...
Q: Please explain the reasoning behind this formula. Expected inflation rate=10Year T bill rate−10 Yea...
A: Inflation is the steady loss of a currency's buying value. The rate at which an economy's purchasing...
Q: Here is Ahmad's credit card statement for the month of November. Transaction Date Transaction amount...
A: Date Transaction Transaction Amount 01 November 2022 Beginning balance $ 1,500.03 ...
Q: Q4) a) Dimond 7 has been operating an excavation company in British Columbia for the last 20 years. ...
A: WACC stands for weighted average cost of capital. It represents a firm's average cost of capital fr...
Q: When discussing a mix of risky assets please briefly explain the following concepts, making sure you...
A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts fo...
Q: ingalls Engineering is a manufacturer that produces bracket assemblies. Demand for bracket assemblie...
A: In the given case , X is a bracket assembly which company manufactures. Various items A B C D E F G...
Q: Explain 1-2 sentences Financial Risk Interest Rates Volatility Foreign Currency Liquidity Derivati...
A: Financial risk is a type of risk that can lead to the loss of stakeholder capital. For the governmen...
Q: Bond Price Bond Par Value 1,000 Coupon rate Yield to Maturity 5% 7% Term in Years 7 Bond Price Bond ...
A: We need to use PV formula in excel to calculate bond price and RATE function to calculate YTM. For...
Q: Q1. Tom Fong Music Inc., has an outstanding bond callable at $1,340. The total value of the bond is ...
A: Solution : C : $ 40.20 Millon
Q: firm considering the installation of an automatic data processing unit to handle some of its account...
A: The equipment can be purchased by cash payment but may be leased also by payment of lease which give...
Q: Motorhed Inc is currently trading at $8 per share with 2.5 billion shares on issue. It announces a 2...
A: Current price -$8 No of shares – 2.5 billion Total value of shares = 2.5*8 = $20 billion Right iss...
Q: What is the difference between a coupon rate, yield to maturity, and current yield? What is Fisher e...
A: Concept coupon rate, yield to maturity, and current yield All the above terms are associated with bo...
Q: Describe the potential costs and benefits of LBOs?
A: LBO is the acquisition method where the company used to use the borrowed money in order to acquire t...
Q: If that 55% return on investment (ROI) occurs over a decade, r = .55 and n = 10, so the annualized r...
A: Return on investment is defined as the return generated by investment as a percentage of investment....
Q: A corporation has a taxable income of $7,356,401. At this income level, the federal income rate is ...
A: Given that: Total Income=$7,356,401 Local Tax= 13% State Tax= 21% federal income rate =46%
Q: Isabella purchased $20,000 worth of 26-week T-Bills for $19,700. What will be the rate of return on ...
A: Initial investment (P) =$19,700 Maturity value(S)=$20,000 since maturity period is 26 week= 26*7=182...
Q: Bond valuation Bond X is noncallable and has 20 years to maturity, a 7% annual coupon, and a $1,000...
A: Hi! Thank you for the question , As per the Honor code , we are allowed to answer the one question i...
Q: eBook Problem 16-07 Assume that the rate of inflation is 5 percent and continues indefinitely and t...
A: Future Value refers to the value of the current asset or investment of cash flows at a specified in...
Q: How does extent of rivalry among competitors affect the investment industry sector?
A: Here we are supposed to elaborate the degree to which the rivalry among the competitors affects the ...
Q: A mutual fund has total assets of $45,000,000 and total liabilities of $4,000,000. There are 1,800,0...
A: Solution:- Net Asset Value (NAV) of mutual fund means per unit net value of each unit. NAV = (Total ...
Q: 7. LSP Corporation has forecasted sales of $120,000, operating expenses excluding depreciation and a...
A: Sales (S) = $120,000 Operating expenses (O) = $40,000 Amortization and depreciation (D) = $20,000 Ne...
Q: Find the nominal rate which if converted quarterly could be used instead of 12% compounded monthly.
A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his inve...
Q: Annette has just inherited $180,000. She invests this money at a rate of return of 6.47% per year co...
A: Given: Present value $180,000 Rate 6.47% Another annuity $2,851 Years 20 Compounding Quar...
Q: How much more money is required to fund an ordinary perpetuity than a 25-year ordinary annuity if bo...
A: Effective Annual rate: It is the interest rate on loan/investment restated from the nominal intere...
Q: An investment of $100,000 in safe 10-year corporate bonds yields an average of 12% per year, payable...
A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...
Q: 10. Sunny Corp. had a net income during 2018 of $200m, and after paying out dividends to shareholder...
A: Net income = $200m Opening retained earning = $700m Closing retained earning = $840m
Q: Español On April 1, the home mortgage balance was $100,000 for the home owned by Amy Sanchez. The in...
A: Interest amount will be calculated Interest amount in April =Mortgage balance*monthly interest rate ...
Q: As the Finance Manager of Wynter's Bedding Manafacturing (WBM), you need to detemine the discount ra...
A: To meet the financial needs of the business, companies raise the funds from various sources. Company...
Q: Why might disinflation prove favorable to financial assets?
A: Disinflation is the reduction or lowering of the pace of inflation. In other words in situation of d...
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 1 images
- Ahmad is taking out an amortized loan for $25,000 to buy a new car and is deciding between the offers from two lenders.He wants to know which one would be the better deal over the life of the car loan, and by how much.Answer each part. Do not round intermediate computations, and round your answers to the nearest cent.If necessary, refer to the list of financial formulas . (a) A savings and loan association has offered him a 5 -year car loan at an annual interest rate of 9.3% . Find the monthly payment. $ (b) An online lending company has offered him a 5 -year car loan at an annual interest rate of 8.9% . Find the monthly payment. $ (c) Suppose Ahmad pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? Savings and loan association The total amount paid would be$less than to the online lending company. Online lending company…Lashonda is taking out an amortized loan for $29,000 to buy a new car and is deciding between the offers from two lenders.She wants to know which one would be the better deal over the life of the car loan, and by how much.Answer each part. Do not round intermediate computations, and round your answers to the nearest cent.If necessary, refer to the list of financial formulas . (a) Her credit union has offered her a 7 -year car loan at an annual interest rate of 6.4% . Find the monthly payment. $ (b) A bank has offered her a 5 -year car loan at an annual interest rate of 6.4% . Find the monthly payment. $ (c) Suppose Lashonda pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? Credit union The total amount paid would be$less than to the bank. Bank The total amount paid would be$less than to the credit union.The owner of a small furniture manufacturer is retiring and is interested in selling the business to her fifteen employees. The firm owns all its building and equipment and has inventory of wood, finished products it values at $50,000, and an existing mortgage loan with a $100,000 balance. The owner is asking $1,000,000 for the business and all its assets. Assuming the employees do not simply have $1M cash on hand, identify and explain which source(s) of financing would support the transaction?
- Ivanna is taking out a mortgage for $165,000 to buy a new house and is deciding between the offers from two lenders. She wants to know which one would be the better deal over the life of the mortgage loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A savings and loan association has offered her a 30 -year mortgage loan at an annual interest rate of 4.6% . Find the monthly payment. $ (b) An online lending company has offered her a 15 -year mortgage loan at an annual interest rate of 4.4% . Find the monthly payment. $ (c) Suppose Ivanna pays the monthly payment each month for the full term. Which lender's mortgage loan would have the lowest total amount to pay off, and by how much? Savings and loan association The total amount paid would be$less than to the online lending company. Online…Joe Latte completed a business plan and determines that it will take$120,000 to open the coffee and gelato shop. He has $30,000 of his ownmoney and will have to obtain $90,000 in loans or grants. How should Joego about getting financing? What is the probability that he can obtain agrant to start a combination coffee and Italian ice cream shop?Sarah and Gabe are considering the following transactions and have asked you to explain the impact of the transactions on their Statement of Financial Position: Purchase a baseball card collection from Gabe’s uncle for $5,000 cash. Gabe feels the cards are worth more than $5,000. There has never been an official appraisal of the collection. Secure a home-equity loan of $25,000 to have on hand for various projects and possibly to take a family vacation abroad. Trade the pick-up for an SUV at a cost of $40,000. They will use their pick-up truck as a trade-in as a down payment, the current value is estimated at $7,000, and borrow the balance at a projected rate of 5%. Also, they anticipate their respective 401(k) accounts increasing in value by 15% this year and have asked if this will have any impact on their financial statements. please explain properly thnku
- Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. What is your present annual net income? P 450,000 Can you avail of a loan of P 500,000? Yes What bank and what is the interest rate? Land Bank @ 17% With the new equipment, how much additional income will it generate? P 450,000 In how many year are you going to pay the loan? 5 years How much are you willing to pay Dindin as salary or profit? P 160,000 You drafted the following information and filed it up: Net income…Ryan Enterprises has a business plan for a QR Shopper, a start-up business. He is considering two financing alternatives for a business loan. Ryan is concerned about several issues that may influence the decision. One such issue is the comparative impact of the two alternatives on financial statements. Below are the two financing alternatives that Ryan Enterprises is considering: Alternative A: A seven-year business loan in the amount of $450,000 with a 4.25% interest rate. The terms of the loan require payments of principal and interest every six months at the end of each period (six-months). Alternative B: A five-year business loan in the amount of $450,000 with a 5.0% interest rate. The terms of the loan require payments of principal and interest every quarter at the beginning of each period (quarter). Required: Prepare the amortization schedule for each alternative. Create a separate worksheet…After visiting several automobile dealerships, Richard selects the car he wants. He likes its $10,500 price, but financing through the dealer is no bargain. He has $2,100 cash for a down payment, so he needs an $8,400 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,400 for a period of two years at an add-on interest rate of 10 percent. a) What is the total interest on Richard’s loan? b) What is the total cost of the car? c) What is the monthly payment? d) What is the annual percentage rate (APR)?
- Sara Beth wants to purchase a used car in excellent condition. She has decided on a car with low mileage that will cost $20,000. After considering several alternatives, she identified a local lending source that will charge her an interest rate of 6% per annum compounded monthly for a 48 month loan: (a) What will be the size of her monthly payments? (b) What will be the remaining balance on her loan immediately after making her 24th payment? (c) If she chooses to pay off the loan at the time of her 36th payment, how much must she pay? (d) What portion of her 12th payment is interest? (e) What portion of her 12th payment is an equity payment?This is a Debt Coverage Ratio or DCR question for part a and a CAP rate question for part b]. Wendy is going to purchase a commercial building and is working with a commercial lender at her local bank. The bank has some loan parameters that Wendy must follow. Understanding the rules will allow her to calculate her cash, income, and payment projections. The bank requires a 1.4 debt coverage ratio for her project. Wendy needs to calculate her net operating income or NOI first. The debt coverage ratio is based on this number. Then she will apply for a 20 year loan at 5% with annual payments. Information on the property includes: Gross rents- $780,000 Vacancy 5% Salaries $85,000 Other Fixed Expenses $125,000 Variable Expenses 20% of gross rents. NOI=_________________ Use the NOI and Debt Coverage requirement to calculate the answer. What is the largest annual payment the bank will allow? If Wendy had to buy the property at a 6% CAP (capitalization) rate, what is the asking price?Kayla Gordan plans to borrow $300,000 from ANZ bank to set up a Nail Salon.She currently has $10,000 in savings and she will use her house as security for the loan.Which of the following best represents a risk associated with this financing method? A.Kayla's proportion of business ownership will be diluted B.Interest payments are tax deductible C.Bank will repossess her house if she defaults on the loan D.Kayla is required to pay dividends to the bank