2. A student purchases a computer by obtaining a simple interest loan. The computer costs P21,500, and the interest rate on the loan is 12%. If the loan is to be paid back in weekly installments over 2 years, calculate: a. The amount of interest paid over the 2 years, b. The total amount to be paid back, c. The weekly payment amount.

Q: List two advantages of using NPV.

A: Net present value is the difference between the present value of cash inflows and the present values…

Q: Consider a position of two purchased calls (AT&T, three months, K30) and one written put (AT&T,…

A: Delta is a commonly used Greek letter in options trading to represent the sensitivity of an option's…

Q: Describe about the DVL methods and what are its advantages?

A: Dollar-value-LIFO: This method shows all the inventory figures at a dollar price rather than units.…

Q: Compare simple interest to compound interest.

A: Answer: Simple interest: This is the fundamental type of interest in which interest is paid on the…

Q: Explain compound interest.

A: Compound interest.

Q: Give an example of each.

A: Cost standard example: The estimation to regulate the entire direct material cost standard and…

Q: Illustrates how you may obtain the true IRR by using the Goal Seek function?

A: IRR refers to the rate of return at which the net present value of a project is zero. This is the…

Q: Define the term predictive value.

A: Predictive value refers to the fact that quality financial information can be used to base…

Q: Explain about the Black–Scholes model.

A: Black Scholes option pricing model is probably the most commonly used option pricing model in…

Q: What is a limit order?

A: Limit order It is such an order to buy or trade a security at or superior to a predefined cost. The…

Q: Modigliani and Miller's Method - discuss briefly

A: Modigliani-Miller Theorem: It represents one of the most significant theorems in the field of…

Q: What are ESOPs? What are some of their advantages anddisadvantages?

A: ESOP: Employee stock ownership plan is retirement plans for employees of the company wherein the…

Q: Draw a figure to explain Elements of required return - establishing a MARR?

A: The figure is represented as below: Note: Values assumed

Q: you

A: a) The expected dividends for the next 4 years are:   Year 1: $3.00 x 1.08 = $3.24 Year 2: $3.24 x…

Q: What are the CVP assumptions?

A:

Q: Describe the process of calculating NPV.

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: What is the DCF method?

A: DCF is a complex tool for valuation which approximates the value of any investment depending upon…

Q: What are the assumptions of Walter’s model?

A: The Walter Model of Careers is an influential theory in the field of career development. This model…

Q: Explain Replacement-Analysis Fundamentals?

A: Replacement-analysis fundamentalUnder this, the decision regarding the replacement of obsolete as…

Q: Define Simple interest.

A: Simple interest: The amount of interest computed on the principal amount for a time period at a…

Q: what is a provable intrinsic value? can you give a example

A: Intrinsic value of a stock is its fundamental value. This is calculated by taking in to…

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.