A lender is considering what terms to allow on a loan. Current market terms are 9 percent interest for 25 years for a fully amortizing loan. The borrower, Rich, has requested a loan of $108,000. The lender believes that extra credit analysis and careful loan control will have to be exercised because Rich has never borrowed such a large sum before. In addition, the lender expects that market rates will move upward very soon, perhaps even before the loan is closed. To be on the safe side, the lender decides to extend to Rich a CPM loan commitment for $102,600 at 9 percent interest for 25 years; however, the lender wants to charge a loan origination fee to make the mortgage loan yield 10 percent. Required: a. What origination fee should the lender charge? b. What fee should be charged if it is expected that the loan will be repaid after 10 years? (For all requirements, do not round intermediate calculations and round your final answers to 2 decimal places.) a. Loan origination fee - 25 year loan b. Loan origination fee - 10 year loan

Q: C, F, and G. Thank you!

A: Working capital: The working capital formula tells us the short-term liquid assets remaining after…

Q: If the company sells produces and sells 3,000 baskets how much operating income will they make A)…

A: Direct material rate per unit = $16,000/2000 = $8 per unit Direct Labour rate per unit =…

Q: What is Gordon model?

A: Intrinsic value of a stock is based on the internal information of an organization. That is, market…

Q: What islockbox system?

A: Banks provide various services to the organizations such as lock box facility, overdraft facility,…

Q: What is BATNA?

A:

Q: I need help

A: A payroll journal is a written record of accounting transactions pertaining to payroll. Payroll…

Q: What is Miller model?

A: It represents the impact of individual taxes or personal taxes into the valuation of a levered firm,…

Q: Uncollectible Accounts-Percentage of Sales and Percentage of Recelvab At the end of the current…

A: We shall answer the first question since the exact one was not specified. Please resubmit a new…

Q: Identify the gragh?

A: Part a: Total direct material cost increases or decreases in direct proportion to change in activity…

Q: Define Volcker rule

A: Volcker Rule is a regulation that implies restrictions on the banks to involve in the stock market…

Q: What is MM Proposition I?

A: Modigliani and Miller’s approach is an element of economic theory and it forms the basis for modern…

Q: kindly, explain more

A: When deciding where to invest there many factors that need to be considered in order to take any…

Q: What is PNL?

A: The term PNL is used in accounting, finance, and business to refer profit and loss.

Q: 35. If the company produces and sells 2,000 baskets how much will their cost of goods sold be?…

A: Workings: Calculation of variable cost per unit: Total baskets produced = 2000 direct materials cost…

Q: Define unicorn

A: The term Unicorn in finance was popularized by Aileen Lee, a popular venture capitalist &…

Q: Please see images

A: Inventory is the goods and material a business holds for resale. LIFO:-  As the name suggests Last…

Q: a. Prepare a common-sized income statement comparing the results of operations for Sorenson…

A: Common size income statement is used for vertical analysis wherein each item in the income statement…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.