Emerson developed a new style of camping trailer. He is considering a licensing agreement with Easy-Tow, who will manufacture the new trailer. They are proposing to pay him $36,000 now, and $18,000 atthe beginning of each of the eleven years of the licensing agreement, starting in two years. If interest is 5.35% compounded semi-annually, what is the agreement worth today?The agreement is worth $ today.(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Value of agreements today would be the equivalent of money today that is equivalent to the money to…

Answered: Emerson developed a new style of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 1P

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Emerson developed a new style of camping trailer. He is considering a licensing agreement with Easy-Tow, who will manufacture the new trailer. They are proposing to pay him $38000 now, and $19000 at the beginning of each of the eleven years of the licensing agreement, starting in one year. If interest is 5.9% compounded semi-annually, what is the agreement worth today?
Earl Miller, owner of a Papa Gino’s franchise, wants to buy a new delivery truck in 6 years. He estimates the truck will cost $30,000. If Earl invests $20,000 now at 5% interest compounded semiannually. How much more or less will Earl have for the truck at the end of 6 years? (Round your answers to the nearest cent.)
Sandy is buying a new chair for $36,425, including a shipping charge of $1300. She is considering the following two credit options: •Financing through the dealership at 4.3%, compounded monthly, for a term of four years, with the incentive that the dealership will Pay the $1300 shipping charge • A bank loan at 4%, compounded monthly, for a term of five years a) what are the monthly payments for each option? b) what is the total payment for each option? c) what are the advantages and disadvantages of each option?
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $4,100? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a lower interest ratetry to negotiate a higher interest ratemake a lower down paymenttry to bargain for a higher sale pricemake a higher down paymenttry to bargain for a lower sale price (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down. What…
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $4,100? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a higher interest ratetry to bargain for a lower sale pricetry to negotiate a lower interest ratemake a lower down paymenttry to bargain for a higher sale pricemake a higher down payment (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down. What…
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $4,100? Yes, under these conditions, Chuck will meet his goal. No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a higher interest rate make a lower down payment try to bargain for a higher sale price make a higher down payment try to negotiate a lower interest rate try to bargain for a lower sale price (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down. What will Chuck's…
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $4,300? Yes, under these conditions, Chuck will meet his goal. No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a higher interest rate make a higher down payment make a lower down payment try to bargain for a higher sale price try to negotiate a lower interest rate try to bargain for lower sale price (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down. What will Chuck's…
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ 4257.64 × Can he pay off the loan and keep his payments under $4,300? Yes, under these conditions, Chuck will meet his goal. No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) □ □ □ □ □ make a lower down payment try to bargain for a lower sale price make a higher down payment try to negotiate a higher interest rate try to bargain for a higher sale price try to negotiate a lower interest rate
Molly needs to decide whether to buy a water heater for $2200 cash and enter a service contract requiring a paymen of $30 at the end of every 3 months for 10 years or to enter a 10 years lease requiring a payment of $90 at the beginning of every 3 months. If the leased water heater can be bought after 10 years for $80, should Molly buy or lease the water heater, if money is compounded quarterly at 2.5%? Answer: Present value of cash payment for the water heater $2200
Karl Yates needs $7000 to pay for the remodeling work on his house. A contractor agrees to do the work in 2 months. What is the present value of $7,000 at 5.9% simple interest in order to accumulate the $7,000 in 2 months? The present value is (Round to the nearest cent as needed.
Cromwell is acquiring some land for $1,200,000 in exchange for semiannual payments of $75,000 at an interest rate of 6.35 percent. How many years will it take Cromwell to pay for this purchase? Is there a calculator solution for this?
Susan Carver will purchase a home for $500,000. She will use a down payment of 23% and finance the remaining portion at 6.6%, compounded monthly for 35 years. Complete parts (a) through (c) below. (a) What will be the monthly payment? Susan will pay $ each month. (Round to the nearest cent as needed.) (b) How much will remain on the loan after making payments for 10 years? The amount remaining on the loan will be $ (Round to the nearest cent as needed.) (c) How much interest will be paid on the total amount of the loan over the course of 35 years? The amount of interest that will be paid is $ (Round to the nearest cent as needed.)

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