Exercise B-9 (Algo) Present value of an annuity LO P3Dave Krug finances a new automobile by paying $6,100 cash and agreeing to make 10 monthly payments of $470 each, the firstpayment to be made one month after the purchase. The loan bears interest at an annual rate of 12%. What is the cost of theautomobile? (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor"to 4 decimal places.)Monthly Payment$Table Values are Based on:Present Value of Loan470nWTable FactorCash DownPaymentPresent Value ofLoanCost of theAutomobile

Sometimes, business entities acquire assets on a deferred payment basis, In such cases, the acquired…

Answered: Dave Krug finances a new automobile by…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A design studio received a loan of $8,950 at 5.60% compounded semi-annually to purchase a camera. If they settled the loan in 2 years by making quarterly payments, construct the amortization schedule for the loan and answer the following questions: a. What was the payment size? Round to the nearest cent b. What was the size of the interest portion on the first payment? ← a acer SUBMIT QUESTION SAVE PROGRESS V SUBMIT ASSIC
Sheffield Excavating Inc. is purchasing a bulldozer. The equipment has a price of $93,800. The manufacturer has offered a payment plan that would allow Sheffield to make 10 equal annual payments of $18,700.00, with the first payment due one year after the purchase. How much total interest will Sheffield pay on this payment plan? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Total interest $ Sheffieldcould borrow $93,800 from its bank to finance the purchase at an annual rate of 9%.Click here to view factor tablesShould Sheffield borrow from the bank or use the manufacturer’s payment plan to pay for the equipment? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 7%.) Manufacturer's rate %
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Suppose you secure a home improvement loan in the amount of $5,000 from a local bank. The loan officer gives you the following loan terms:• Contract amount = $5,000• Contract period = 24 months• Annual percentage rate = 12%• Monthly installment = $235 .37Shown is the cash flow diagram for this loan. Construct the loan payment schedule by showing the remaining balance, interest payment, and principal payment at the end of each period over the life of the loan.
You want to buy a bus. Cost is $180,000 with 10% down and the rest in 7 equal annual payments which include interest at 6%. The payments begin in one year. How much are the payments? Amortize the loan. Record the Journal Enteries.
Monthly Payment Dave Krug finances a new automobile by paying $5,800 cash and agreeing to make 30 monthly payments of $440 each, the first payment to be made one month after the purchase. The loan bears interest at an annual rate of 12%. What is the cost of the automobile? (PV of $1, FV of $1, PVA of $1, and FVA of $1) $ 440 Table Values are Based on: Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Present Value of Loan n i G II + O Answer is not complete. Table Factor 29.9599 X 30 1% Cash Down Payment 5,800 TOTT Present Value of Loan Cost of the Automobile
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Your company is planning to borrow $1 million on a 5-year, 11%, annual payment, fully amortized term loan. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What fraction of the payment made at the end of the second year will represent repayment of principal? Do not round intermediate calculations. Round your answer to two decimal places. %
Leven Corporation negotiated a short-term loan of $685,000. The loan is due in 10 months and carries a 6.86 interest rate. Use simple interest to calculate the total amount of thetioan. If necessary, round the answer to the nearest cent.
Use either the tables from Appendix E in your textbook or a financial calculator for this question. Libby Company purchased equipment by paying $5,000 cash on the purchase date and agreeing to pay $5,000 every six months during the next four years. The first payment is due six months after the purchase date. Libby's borrowing rate is 8%. The liability reported on the balance sheet as of the purchase date, after the initial $5,000 payment was made: Select the answer that is closest to (within $250 above or below) what you calculated. If an answer is more than $250 away from what you calculated, you should consider it incorrect. Group of answer choices A)$45,000 B)$33,664 C)$38,664 d)$40,000 e)None of the above
Compute the monthly payment and the total amount spent for a vehicle that costs $24,000 if you finance the entire purchase over 5 years at an annual rate of 8 25 percent. Calculate the payment if you finance the car for only four years. Finally, calculate the payment for three years. What do you notice about the payment under the different time assumptions? Note: Round intermediate computations to at least five (5) decimal places Click on the table icon to view the MILPF table The monthly payment, PMT, on the 5-year auto loan is $ (Round to the nearest cent.) The total amount spent if you financed $24,000 for 5 years at 8 25 percent per year is $ (Round to the nearest cent.) The monthly payment, PMT, on the 4-year auto loan is $ (Round to the nearest cent.) Finally, the monthly payment, PMT, on the 3-year auto loan is $ (Round to the nearest cent.) What do you notice about the payment under the different time assumptions? (Select the best choice below.) OA. As the number of payments…
Suppose you take out a 36-month installment loan to finance a delivery van for $26,100. The payments are $987 per month, and the total finance charge is $9,432. After 25 months, you decide to pay off the loan. After calculating the finance charge rebate, find your loan payoff (in $). (Round your answer to the nearest cent.) $ 8938.537

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