B. Solve the following problem 1. Ray put P10,000 into a savings account. The interest on the account is 3.5%. He wants to put the money away for 18 months. Using simple interest method, how much will Ray have at the end of that time period?

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: What are some of the advantages of a multi-step approach?

A: An extensive examination of a company's costs and net income is provided by a multi-step income…

Q: Describe the differences between a formula and a function?

A: A formula is an equation or expression that, when entered into a spreadsheet or other application,…

Q: What exactly are ESOPs? What are some of its benefits and drawbacks?

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

Q: What assumptions underlie the EOQ model?

A: The model that helps in calculating the optimal amount of quantity needs to be purchase for…

Q: From where has the concept DU pont Analysis comes?what’s the formula?

A: Ratio Analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: Sensitivity Analysis Methods

A: Sensitivity analysis is an analysis method that is used to identify how many variations in the input…

Q: Write two examples of SWOT analysis

A: 2. SWOT analysis for Sedibeng Breweries Strength: Capital stock: A strong capital base has been…

Q: Explain compound interest.

A: Compound interest.

Q: Discuss the following. 1. The Advantages of Linear Programming in Decision Making b. The…

A: Advantages of Linear Programming in Decision Making:Optimal Solutions: Linear programming helps in…

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: Explain the drawbacks of IRR over MIRR with example?

A: Capital budgeting is part of investment decisions. Business firms consider capital budgeting 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: Consider REMICs?

A: A real estate mortgage investment conduit (REMIC) is a difficult puddle of mortgage securities…

Q: What are the different techniques of computing interest?

A: The different techniques of computing interest of explanation:

Q: Why is compound and simple interest different

A: If you have any questions let me know in comment box thankyou for your question.

Q: What are the advantages and disadvantages of  LIFO?

A: Last-in-First-Out: In Last-in-First Out method, the costs of last purchased items are considered as…

Q: What are two advantages of ADR? List and provide an example for each.

A: ADR refers to the American Depositary Receipt. ADR is a negotiable certificate which represents a…

Q: How can we solve the problem by using interest table?

A: Interest table is also known as interest factor table which can be used to determine the future…

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: Describe the fundamentals of Replacement-Analysis?

A: Replacement analysis is the process where it is determined whether it would be beneficial to replace…

Q: What are the Replacement-Analysis Fundamentals?

A: Replacement analysis refers to the process where an organization determines whether it is beneficial…

Q: d. What is the expected value of perfect information?

A: The expected value of perfect information is the price that a healthcare decision-maker would be…

Q: What does the intrinsic value formula look like? Please explain the components of the formula.

A: Intrinsic value or the real value is the calculated value or anticipated value of a company’s stock…

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: What is forward points?

A: Forward points are nothing but basis points added or subtracted from the spot rate of an underlying…

Q: Explain Replacement-Analysis Fundamentals?

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

Q: Provide worded problem about compound interest

A:

Q: Define Simple interest.

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

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.