The owner of a restaurant needs to borrow ₱120,000 from a bank to buy some equipment. The bank will give the owner a discounted loan at 11% rate of interest for 9 months. What loan amount should be used so that the owner will receive ₱120,000?

The owner of a restaurant needs to borrow ₱120,000 from a bank to buy some equipment. The bank will give the owner a discounted loan at 11% rate of interest for 9 months. What loan amount should be used so that the owner will receive ₱120,000?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

See similar textbooks

Related questions

Q: Solace has been working for a year as an analyst for an investment company that specializes in…

A: Given in this question, The following are the details , State of the Economy Probability…

Q: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

Q: pany has the following: 1,000,000 shares outstanding A current stock price of $25…

A: Total shareholder return is a financial performance indicator that shows how much money an investor…

Q: There is an insurance plan worth $4,000 , which will return $2,200 per year for the next two years…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: al generated in industrialized countries finds its way to and from emerging mar

A: Capitalized country like US and China have too much capital and other resources so they try to earn…

Q: eligible for redemption before it is due to b

A: A callable bond, also known as a redeemable bond, allows the issuer to redeem it before the maturity…

Q: McClintock Corporation is considering investir $60,000 in a new piece of machinery that will…

A: Present value of the future value is the value without interest that is equivalent today considering…

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: Present the internal rate of return criterion and its strengths and weaknesses.

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: When a low-price stock is replaced by a high-price stock in the Dow Jones index, the divisor will be…

A: Dow Jones index is a price -weigjhted index. Price weighted index is the average of current share…

Q: If a low cost house and lot worth 87,000 were offered at 10% down payment and 500 per month for 25…

A: Cost of house = 87,000 Down payment = 10% Payment per month = 500 Time Period = 25 Years

Q: Accounting rate of return. Calculate the payback period in years & months Compute the net present…

A: The rate of return refers to the incremental amount of net income which is expected from the…

Q: Styles Ms. Rahat hails from a business family. She is considering starting a supermarket with an…

A: " Hi, Thanks for the question. Since you asked multiple sub parts question, we will answer first…

Q: A newly hired Sanitary Engineer was made to evaluate the following conditions; An equipment package…

A: Concept. Equivalent annual cost is annual cost of owning and maintaining asset determined by…

Q: million

A: Cash flow shows the inflow and outflow of cash in a particular period of time. It signifies the…

Q: Angela's bank gave her a 2-year add-on interest loan for $6,120 to pay for new equipment for her…

A: Loan is a value which is borrowed from external sources like banks and this amount is paid later…

Q: The price of a bond with no expiration date is originally $5,000 and it pays an annual interest…

A: The bond that provides coupon payment indefinitely to the bondholder is called a perpetual bond with…

Q: A flower shop owner wants to pay off the loan on a used delivery van that was purchased 32 months…

A: Given: Duration of Loan " N" = 4 years = 4*12 = 48 Finance charge = $250 monthly payment = $230…

Q: You need a particular piece of equipment for your production process. An equipment-leasing company…

A: We will have to compute the present value of lease and present value in case the equipment is…

Q: suppose that the Matrix corporation has $120 million of assets, all financed with equity, and that…

A: The combination of debt and equity used to fund a company's assets and activities is referred to as…

Q: Suppose an investor gave you $150,000 to start your business. You gave this investor 50 percent of…

A: ROI The return on investment (ROI) is calculated as a percentage of profit generated by a certain…

Q: The beneficiary of life insurance of policy is to receive $2000 a year for 5 years, the first paymen…

A: Present value of future cash flow is the amount that is equivalent today considering the period and…

Q: What are entrepreneurship theories of innovation and a function of high achievement?

A: The creation or extraction of value is defined as entrepreneurship. According to this definition,…

Q: expected return and volatility (

A: Expected return refers to the profit or loss that an investor should earn from an investment that…

Q: Sierra Company is considering a long-term investment project called ZIP. ZIP will require an…

A: Solution:- We know, Internal Rate of Return (IRR) is the rate of return the project is yielding ie.…

Q: Please show the formula used. You have 100 pesos a month you can deposit into an account earning…

A: The number of the months required can be calculated with the help of NPER function of Excel.

Q: On January 1, 2021, Takemichi Company sold a piece of equipment to Hina Company with a cost of…

A: We know that Interest is calculated on outstanding balance. Interest = Outstanding Balance x Rate of…

Q: You expect to receive the following: $4,398 at the end of each year for 12 years $22,256 today…

A: The present value of future cash flow will be the value today without interest and also considering…

Q: How emergence or evolution of entrepreneurship took plate? Please explain in Detail.

A: Today, entrepreneurs are paving the way for success as entrepreneurs. They find opportunities, lead…

Q: How much will deposits of $35 made at the end of each month amount to after 12 years if interest is…

A: Amount deposited each month = $ 35 Amount deposited in each quarter = $35*3 = $105 = PMT Number of…

Q: You have $100,000 to invest. You choose to put $150,000 into the market by borrowing $50,000. a. If…

A: Investment means engaging your funds to generate income for the future. Return means amount earned…

Q: Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the…

A: As per the honor code only 1 question needs to be solved. hence 1st question is solved

Q: an investor can earn abnormal returns based on insider trading, the stock market is at best…

A: 1) Fundamental Analysis and Insider trading can earn abnormal returns in a weak-form efficient…

Q: The risk-free rate on T-bills recently was 1.23%. If the real rate of interest is estimated to be…

A: Concept. Real interest rate and inflation. Nominal interest rate on financial instruments such as…

Q: What is the premium or discount and the purchase price of the bonds to yield 9% compounded

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: Please show the formula used. Find the present value, in pesos, given an annual perpetuity of 1,000…

A: The present value of a perpetuity is simply calculated as ratio of annual cash flows and the…

Q: A debt of $8,000 accumulated interest at 2.5% compounded annually for 15 months, after which the…

A: Given, A debt = $8,000 Accumulated interest = 2.5% compounded annually for 15 months New rate…

Q: O.FDI, II. portfolio, II. portfolio, IV. FDI

A: Investment refers to an asset that is acquired for the purpose of generating income or…

Q: A sum of ₱ 35,000 is invested from March 8,2019 to December 5,2019, at 18 ½ % Simple Interest. Find…

A: Simple interest is a quick and straightforward way to calculate a loan's interest charge. Simple…

Q: much of the value of the account can be attributed to the interest earned? 5)You want have $12,000…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: How much of each bond issue would you have to buy to immunize the portfolio?

A: For a portfolio to be immunized, the duration of assets should be equal to liabilities. This risk…

Q: in CengageNOWv2| Online teachi x Cengage Learning 8-1 Problem Set: Module Eight X…

A: Cash flow from operating activities consists of cash inflows and cash outflows from day to day…

Q: You are given the following information concerning a firm: Assets required for operation: $6,000,000…

A: As per Bartleby guidelines,If a question with multiple sub-parts are posted, first 3 sub-parts will…

Q: Suppose you bought a sofa for a total purchase price of $1,184.97. State taxes were 4%. What was the…

A: Tax is referred as the compulsory financial charge, which are imposed by the government on the…

Q: A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax…

A: For evaluating any new asset or project, cashflows are considered. For overall evaluation cashflows…

Q: Direction: Read the statements carefully. Write TRUE if the statement is correct. Otherwise, write…

A: Because you have asked question with multiple parts (MULTI PART) , we will solve the first 3 parts…

Q: TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the…

A: Depreciation of a currency means that the value of the currency with respect to the other decreases,…

Q: Its coupon As a bond approaches maturity, its value is approaching $1000 plus the discount or…

A: Bond: It is a debt instrument issued by the company for raising capital and the bondholder receives…

Q: Stretching payables refers to postponing payment of bills to their due dates or last date of…

A: The Cash Conversion Cycle (CCC) is one of the various quantitative indicators that may be used to…

Q: 21.A firm considering the installation of an automatic data processing unit to handle some of its…

A: If the present value of leases is less than the cost to buy, then leasing should be preferred,…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

1. Pau’s company borrows Php 500,000 from the local bank to invest in a personal computer for the quality control department on the term that the company will pay back Php 120,000 each year for the next 5 years. The first payment is due on the first loan anniversary. What interest rate the bank is charging if compounding is annual?
A BUILDING CONTRACTOR GIVES A $14,000 PROMISSORY NOTE TO A PLUMBER WHO HAS LOANED HIM $14000. tNHE NITE IS DUE IN 9 MONTHS WITH INTEREST AT 9%. SIX MONTHS AFTER THE NOTE IS SIGNED, THE PLUMBER SELLS IT TO A BANK. IF THE BANK GETS A 10% RETUEN ON ITS INVESTMENT, HOW MUCH WILL THE PLUMBER RECIEVE??
A man borrows Php10,000 from a loan firm. The rate of simple interest is 15%, but the interest is to be deducted from the loan at the time the money is borrowed. At the end of one year he has to pay back Php10,000. What is the actual rate of interest?
Blush Inc., sold a kitchen appliance that costs $1,000.00 with 5-year financing to a customer who made a down payment of $510.00. What should be the size of the loan payments at the end of every month if interest of 9.00% compounded monthly is charged? You plan to save money for a down payment of $39,000 to purchase an apartment. You can only afford to save $6,000 at the end of every 6 months into an account that earns interest at 4.25% compounded monthly. How long will it take you to save the planned amount?
A business man who owns a chain of fast foods needs to borrow 15,000 dollars to remodel his business. The bank offers to loan the 15,000 to the business man for 24 months only. He must make monthly payments of 1000 dollars. Find the monthly interest rate of the loan and the effective annual interest rate using the interpolation method
A small business is paying off a machine loan to the bank. Knowing that the installment is R$ 2,000 for 24 months at a rate of 2% per month, how much will she have paid at the end of the financing?
Suppose you are getting a loan from a bank to purchase a feed business. The interest rate on the loan is 5 percent, the amount of the loan is $1,000,000. The loan Is for 10 years. The bank is charging you $40,000 for the loan in cash on the day of closing, what is the APR?
Zara Corporation borrowed RM100,000 from their bank for one year. The bank required the company to pay RM9,500 in interest at the end of the year plus maintain a minimum balance of RM10,000 with the bank in a chequing account throughout the year. What is the effective interest rate on this loan?
A man bought a refrigerator for P500 down and P300 per month for 24 months. The same brand of refrigerator could have been purchased for P6,750 cash. What nominal annual interest rate is the man paying?
An amount of $15,000 is borrowed from a bank to finance a purchase of a new car for a period of 4 years. The banks offers the loan with 5% annual interest rate. What will be the fixed monthly payments?
You want to buy a car worth ₱808,000 at Hyundai Branch through EastWest Bank’s 5-year car loan program. EastWest Bank requires you to pay the 20 percent down payment at Hyundai Branch; the remaining balance shall be your amount loaned from EastWest Bank. If the bank uses an annual interest rate of 0.00132%, compounded monthly, determine the following: a.How much money will the bank finance? b.What is the monthly interest rate of your loan? c.How much money will be bank acquired from you in the 5-year car loan? d.How much is your monthly payment? e.How much money will you be spending on buying the ₱808,000 car?
A credit cooperative recently offers a 36-month loan at 4.15% compounded monthly for typhoon victim members. If a member can afford only to pay Php 750 a month, how much can he borrow from the cooperative? What is the total interest he will pay for his loan?