What will be the Effect of the After-Tax Interest Cost on Loan Decisions?

Q: Discusses price changes for interest rates on loans explain why this change may be taking place.

A: Interest rate are the percentage of the loan amount which the borrower needs to pay to the lender in…

Q: Explain in general terms how the portions of loan payments going to principal and interest change…

A: Installment loans gradually pay down the loan principal while the payments remain the same .…

Q: Give and explain the factors that affect the interest rate on the loan

A: Following are the factors that affect interest rate on the loan:  1. Supply and Demand Interest…

Q: What interest rates should be used in determining the amount of interest to be capitalized? How…

A:

Q: What is the difference between the stated interest rate and the market interest rate?

A: Bonds PayableBonds payable are referred to long-term debts of the business, issued to various…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: From the standpoint of a borrower, is long-term or short-term credit riskier? Explain

A: credit risk is define as the chances of a loss due to  borrower's failure to repay obligation in…

Q: Which of the following type of loan is best used for temporary shortfalls of income? a. Secured…

A: Loans can be short term loans or long term loans

Q: What is the Effect of Loan-to-Value Ratio on Loan Cost?

A: LTV ratio tells about the maximum loan approved in terms of the value of the collateral given.

Q: Explain the Factors Important in Mortgage Loan Pricing?

A: Mortgage loan pricing: The process of analysis and arriving at the exact interest rate for a…

Q: Explain the addition to the interest rate, HELOC borrowers consider the issues?

A: Home buyers mostly take loans to buy the home and they will pay the debt in equated installments.…

Q: What is a mini-perm or bullet loan? When and why is this type of loan used?

A: Answer: Project development may be characterized as the process of designing, planning,…

Q: What factors must be considered when deciding whether to refinance a loan after interest rates have…

A: Individuals always consider refinancing the loan when interest rate falls because they think they…

Q: What is the impact of annuity dues in consideration to business matter?

A: Annuity Due: It is the fixed amount of payment that is due immediately at the beginning of each…

Q: When is it recommended to compute the effective interest rate per payment period?

A: When there is a compounding of interest, then the EIR per payment period is recommended. As it is a…

Q: Why might a lender prefer a loan with a lower interest rate and a participation?

A: One meaning of loan participation is multiple lenders participating in lending to the same borrower.…

Q: What do you think about the interest rate i for

A: A recession refers to the time period which is affected by a temporary economic decline during which…

Q: What is the indifference point under the net present value? When would there be a discount on a…

A: SOLUTION- NET PRESENT VALUE = PRESENT VALUE OF CASH INFLOW - PRESENT VALUE OF CASH OUTFLOW.

Q: What are the advantages to borrowers and risks to lenders for each?

A: Borrowers are the people who borrows the money for any specific purpose. Borrowers pay some amount…

Q: How can we determine the borrowing rate of return?

A: The borrowing rate of return is the return that is charged on the borrowings made by the firms or…

Q: What is a buydown loan? What parties are usually involved in this kind of loan?

A: INTRODUCTION There are various mortgage financing techniques which helps to reduce cost for the…

Q: How do inflationary expectations influence interest rates on mortgage loans?

A: Inflation: It is the rate at which the purchasing power of the money decreases every year.…

Q: What are the factors that you need to consider in applying for a loan? Why is it important to…

A: When applying for a loan one need to consider several factors at play. Some of them are quantitative…

Q: What do short-term notes payable represent?

A: Short-term notes payable: short-term notes payable is a written promise made by the business to pay…

Q: Explain Incremental Borrowing Cost versus a Second Mortgage?

A: The lenders offer different repayment terms of the same loan to the different borrowers. The term of…

Q: What are a few things to consider before you cosign a loan?

A: Cosigning a loan means that in case the borrower is unable to make the payments due on loan the…

Q: What are the benefits to the back for amortizing a loan

A: In finance amortized loan is one in which fixed monthly payments are made by the borrower to the…

Q: Which loan should Spike take and why?

A: Simple interest method is a method of computing interest on borrowed amount where interest is…

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: What are mortgage discount points?  When does it make sense to pay points on a loan?  How can a…

A: Mortgage discount point are all such points which will be reducing the total amount of fees which an…

Q: What tax rate should be used in calculating the taxes on the investment's projected income?

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: What is a loan amortization schedule, and what are some ways these schedules are used?

A: Loan is an agreement between lender and borrower where lender provide funds to borrower which repaid…

Q: Which of the following shows the timeline of the loan from the lender's perspective?

A: A lender is the one who lends to the other party. In return, the lender receives the sum with an…

Q: Which form of financing has the lower after-tax cost, debt or equity? Why?

A: There are two sources of financing for a company. One is debt financing and another is equity…

Q: is the potential impact of long-term borrowing?

A: Long-term borrowings: Long term borrowings help companies to attain their long term financial…

Q: What is the meaning of Loan assumably?

A: Introduction: Assumable loan is nothing but a mortgage which can be passed to another party by the…

Q: What is the Cumulative interest payment?

A: Cumulative interest payment is the sum of all previous interest payments that are made for an…

Q: If you were comparing the costs of loans from different lenders, could you use their APRs to…

A: Annual percentage returns (APR): It indicates the rate of interest on the loan of investment. In…

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.