o the peso devaluation, a car of costing P150,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay P40,000 as down payment and P4,000 each month for four years, what is the effective interest rate on the
Q: will result in an ending balance of: (Report an integer)
A: Ending balance will arrive when we multiply the initial amount with 1 + rate of interest and number…
Q: Stag Company will pay dividends of $9.6, $5.9, $9.7 and $10 for the next four years. Thereafter, the…
A: To Find: Current market price of the share
Q: Delta Games Private Limited is a digital gaming company creating fun-to-play games for millenials.…
A: As per the given information: Series-A investment - $5 Mn in the DeltaExpected rate of return -…
Q: 2. Draw the cash flow for a who is person buying a car for 12 months with an initial cost of $15,000…
A: Cash flow diagram shows the cash inflows and the cash outflows with the associated time periods.
Q: The stated interest rate on your account is 12.5%, interest paid monthly. Your effective rate of…
A: Nominal interest rate is 12.5% paid monthly Compounding frequency "n" is 12 To Find: Effective…
Q: Download HW 6 and generate a model to predict Freshman GPA based on Reading scores. A reading score…
A: We need to find the regression fit for the data given. The regression will generate a linear…
Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s…
A: Free cash flows refer to the cash generated by the business organization from its operational…
Q: What are the answers for the following? Construct a cost-volume-profit chart on your own paper.…
A: Cost-Volume-Profit chart Units Sales Varibale cost Fixed Cost Total Cost Profit (a) (b) = (a) *…
Q: For researchers to consider an investment strategy to have delivered abnormal returns, it must have…
A: Abnormal returns measured as stocks actual return less the stock expected return based on its beta…
Q: The fixed rate on a 0x12 FRA is 3% and the fixed rate on a 12x24 FRA is 6%. In both FRA's the…
A: We know the forward rates for year 1 and year 2. We need to find the fixed rate for a 2 year swap.
Q: Using the CAPM theory, if the Volatility of a stock is twice as great as the market, the market…
A: Capital Asset Pricing Model (CAPM) is used to determine expected return on a particular security…
Q: uestion #3
A: Loans are paid by the monthly payments that carry the payment for loan amount and interest amount…
Q: New share price|NPV > announced] The market cap of the firm is $100 million (10 million shares at…
A: Market price per share = (Market Capitalization + Present value of cash flow)/ No of shares…
Q: Isn't the final payment going to be $144.78? How did you get final payment of $138.51
A: Table showing the final payment: Snapshot:
Q: If a certain stock sells for 626.659 dollars on the NYSE, how much will it sell for, in dollars, on…
A: 1) If a Stock trades at more than one stock exchange, then the price at all the stock exchanges will…
Q: What are the key elements to be included in the EL before execution?
A: Earned Leave (EL) Presently, civilian employees are permitted 30 days of earned leave each year.…
Q: Walkure A.G., a multinational corporation from Country A, announced the relocation of its…
A: Market is considered as efficient only if: Intrinsic Value = Stock price Stock prices fully relects…
Q: Which of the following efficient market hypotheses assumes that all information is cost free and…
A: A market is Considered as efficient if: Intrinsic Value= Market Price Or A price of security fully…
Q: Town station is saving money to build a new loading platform. Three years ago they set aside 23,000…
A: Future Value = Present Value * ( 1 + Interest rate) n Interest rate = [ (Future Value/Present…
Q: An investor estimates the expected returns of the following three shares as follows (for three…
A:
Q: You are planning to save for retirement over the next 30 years. To do this, you will invest K700 a…
A:
Q: Find the effective rate to the nearest hundredth for nominal interest rate. 5% compounded…
A: The nominal interest rate and the effective interest rate are the two variations of an interest…
Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) Sean Lee…
A: We will use present value of ordinary annuity formula to calculate size of quarterly payment.
Q: STRICTLY USE THE GIVEN FORMULA IN THE PHOTO ATTACHED 1. How much must a man deposit in a bank that…
A: As there is more compounding than the effective interest rate would be more and future value would…
Q: Period 1: June 1, 2021, to June 7, 2021: On June 4, 2021, Hardcore LLC sold 20% of its 50% holding…
A: From June 1 - June 7 OTC i.e. Over The Counter transaction took place which is trading outside the…
Q: All else equal, when deciding between two loan offers the loan that should be accepted is the one:…
A: We have a multiple choice question on the key factor influencing the decision between two loan…
Q: If the company chooses to drill today, what is the project's net present value?
A: The formula to calculate the PV of cash inflows is as follows: PV of cash inflows = CF1 - (1+r)-nr…
Q: What is the expected rate of return for the company A's bond if the return is 10% for one-fourth of…
A: Expected Return - It is the return from investment in shares/bonds considering the various…
Q: Marginal Incorporated (MI) has determined that its after-tax cost of debt is 9.0%. Its cost of…
A: A firm will have to switch from the internal accruals to external equity if the internal accruals…
Q: Assume that you can invest to earn a stated annual rate of return of 12 percent, but where interest…
A: Semiannual interest rate (r) = 0.06 (i.e. 0.12 / 2) Number of deposits (n) = 20 Semiannual period…
Q: The present value of a deferred annuity of P4,800 every six months for 7 years, with the first…
A: Semi annual payment (P) = P4800 Period = 7 years Number of semi annual payments (n) = 7*2 = 14…
Q: At the time of her grandson's birth, a grandmother deposits $9000 in an account that pays 8%…
A: We will use the below formula to calculate the future value Future value = PV*(1+r)n Where PV -…
Q: McCabe Corporation is expected to pay the following dividends over the next four years: $15, $12,…
A: The current share price can be determined using the dividend growth model which considers the…
Q: Suppose you have purchased some GameStop shares on margin at $5 per share. You ask your broker to…
A: A long position has been taken on margin. The broker has put a stop loss and limit sell order. We…
Q: You can enter into a forward contract for a bond with a maturity in one year months that pays a…
A: We have spot rates, periodic coupon and interest rates. The same can be used to theoretically derive…
Q: What is the effective rate for Investment A? Answer as a percent, rounded to two decimal places.…
A: Information Provided: Investment A rate = 7.35% compounded semi-annually Investment B rate = 7.4%…
Q: You are planning to make 18 monthly withdrawals beginning at the end of the sixth month. You plan to…
A: Number of withdrawals = 18 Monthly interest rate = 1% First deposit of $108 in 6 months. Increase in…
Q: buy a house of $500,000 today. You put a down payment of 20% and borrow a fixed-rate mortgage of…
A: Loans are paid by the monthly payments which are equal fixed payments but the payment of interest…
Q: Being in an industry with perfect competition VS Being in an oligopolistic industry Market Risk -…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: Formulate but do not solve the problem.
A: As per instructions only the formula will be given, the completed solution will not be provided. a =…
Q: Isolde Corporation, a manufacturer of land mines used in civil wars, has operations around the…
A: Solution: Correct answer is option (5) none of the above reaction is consistent with informational…
Q: If you deposit $150 in an account with an APR of 6% and continuous compounding, the balance after 2…
A: Information Provided: Principal = $150 APR = 6% Time = 2 years
Q: Suppose the asking price for a certain stock is $75 per share, the bid price is $74 per share, the…
A: A forward contract, often known as a forward, is a non-standard contract between two parties to buy…
Q: Massy Store makes a $10,500 investment at Republic Bank Ltd on January 1, 2019. At the end of…
A: Future Value refers to the compounded value of a single cash flow received today or multiple cash…
Q: Determine the firm's 2021 tax liability. Determine the firm's 2021 net income.…
A: Corporate tax is that tax which is charged on companies on their pre-tax earnings. Each nation has…
Q: Jack owns a shop that sells furniture. He placed an advertisement in the Friday’s edition of the…
A: Brief summary 1. Jack owns a furniture shop and placed an advertisement in the Friday’s edition of…
Q: Remember from class that YTM - Riskfree = sum of rilk premiums. Assume the risk-free rate is 1.924…
A: Risk free rate = 1.924 Credit risk premium = 1.260 Maturity perium = 1.218
Q: vestor purchases 250 shares of ABC stock at $313 per share. The investor deposits the initial margin…
A: Brokers provide margin for trading in future and options and they also provide loans and they charge…
Q: Stock in Road Pave Zambia has a beta of .85. The market risk premium is 8 percent, and the Bank of…
A: Data given: Beta=0.85 Market risk premium =8 % Risk free rate = 5% (Zambia treasury bills are…
Q: What are the advantages of using duration as opposed to interest-sensitive gap analysis?
A: Asset liability management is a technique used to address the risks that financial institutions face…
-Due to the peso devaluation, a car of costing P150,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay P40,000 as down payment and P4,000 each month for four years, what is the effective interest rate on the diminishing balance?
Step by step
Solved in 2 steps with 1 images
- Because of the peso devaluation, a car costing P150,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay P40,000 as down payment and P4,000 each month for four years, what is the rate on the diminishing balance?Goliath Banking Corporation (GBC) offers an "Income Investment Product" (IIP) for customers. The details for this product is as follows: Customers pay $984.31767830979 to buy an IIP. The IIP will pay out $37 at the end of each year for 12 years The IIP will pay out a further single payment of $1,000 after 12 years There are no further payments after this single payment at time 12 a. Calculate the return GBC promised to investors that buy this product, expressed an effective annual rate. Give your answer as a percentage to 4 decimal places.You have a loan outstanding. It requires making three annual payments at the end of the next three years of $1000 each. Your bank has offered to restructure the loan so that instead of making the three payments as originally agreed, you will make only one final payment at the end of the loan in three years. If the interest rate on the loan is 5%, what final payment will the bank require you to make so that it is indifferent between the two forms of payment?
- If a car is paid P14,000 monthly with no required down payment for 5 years, what is the cash price if the interest rate is 12% compounded monthly?Pls. answer with a solution and pl.s do not use excel.A manufacturer needs to borrow money to purchase a building. The purchase price of thebuilding is $1.5 million, and the company will put $300,000 in cash down at closing. If thecompany can borrow the difference from its bank at 4.85% for 20 years, what will the monthlyprincipal and interest payment of the loan be? Create an amortization schedule also.For items 8-10. A car is to be used in monthly payments of P 17,000 for 4 years starting at the end of 4 months. How many is the fair market value of the car if the interest rate used is 12% converted monthly and down payment is P 65,000? 8. How many artificial payments is given? А. 3 9. How much is the present value of the car? A. P 620,367.89 B. P 626,571.57 _10. How much is the fair market value of the car? A. P 724,906.45 B. P 731,505.52 В. 4 С. 7 D. 8 C. P 666,505.52 D. P 659,906.45 C. P 691,571.57 D. P 685,367.89
- The purchase of a new car requires P100,000 down payment and the balance to be paid at P300,000 after 2 years and P600,000 after 5 years. The rate of interest is 18% compounded monthly. a. Find the present worth of the car. b. Find the lump sum payment if the car is paid after 5 years. c. With a downpayment of P100,000 and monthly interest of 1.50%, find the monthly amortization for the 5 years.A service car whose cash price was P540,000was brought with a down paument of P162,000 and monthly of P10,874.29 for 5 years. What was the rate of interest if compounded monthly?You were able to sell a car worth 2,100,000, which would be financed by a bank. You told your buyer that the required down payment was 20% of the net price. Your buyer also need to pay the monthly amortization of 34,950 for 5 years.How much was the down payment paid by the buyer?How much was the gross balance or the amount to be financed by the bank?How much was your total commission if you received a commision of 5.25% based on the suggested retail price of the car from the car dealer and 1.25% incentive from the bank.How much was the interest rate charged by the bank for requiring the buyer to pay the monthly amortization of 34,950 for 5 years?
- Goliath Banking Corporation (GBC) offers an "Income Investment Product" (IIP) for customers. The details for this product is as follows: Customers pay $941.29024136888 to buy an IIP. The IIP will pay out $49 at the end of each year for 13 years The IIP will pay out a further single payment of $1,000 after 13 years There are no further payments after this single payment at time 13. (a) Calculate the return GBC promised to investors that buy this product, expressed an effective annual rate. Give your answer as a percentage to 4 decimal places. (b) If instead GBC were to offer investors an effective annual return of 3.4571%, what price should they charge for this product? Give your answer in dollars, to the nearest cent. (c) Suppose that GBC decides to delay the final single payment of $1,000 by one year (assume this is permitted in the fine print of the IIP). Assuming no other changes are made, which ONE of the following statements is true for investors that have already purchased…2) Solve the following NPV problems: Problem 1 . Suppose that a borrower receives a 1,000 euro loan from Bank A, with a 10-year maturity at an annual interest rate of 5% with the obligation to pay the interest at the end of each year for the next 10 years. However, at the end of the 6th year, due to financial difficulties, he borrows from the same bank an additional 1,000 euros at an annual interest rate of 5% making the following agreement: a. not to pay any installment at the end of the next two years, i.e. the 7th and 8th year, and b. then pay an equal amount of interest for the next 8 years (i.e. from the end of the 9th year until the end of the 16th year) in order to fully repay the first as well as the second loan. It is requested to calculate the interest-rate installment of the loan that occurred after the restructuring. Problem 2. Suppose that parents make family planning to finance their child's studies and buy a car. The expected costs for studies are EUR 10 000 per year…1. A car costs Php 1,400,000. Suppose a man gives a down payment of Php 400,000 for the car, and then he loaned the balance from a bank. The bank charges a 5% interest rate, compounded monthly, on the loan, which he will pay monthly for 10 years. a. How much will be his monthly amortization? b. How much will be the total interest on this loan?