On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of 12% is due annually. The bank charges Next Co. an 11.19% nonrefundable loan origination fee. The effective interest rate on the loan is approximately equal to a. 11.19% b. 12% c . 16 % d. 17.37%

On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of 12% is due annually. The bank charges Next Co. an 11.19% nonrefundable loan origination fee. The effective interest rate on the loan is approximately equal to a. 11.19% b. 12% c . 16 % d. 17.37%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Current Attempt in Progress The Cullumber Bank requires borrowers to keep an 10 percent compensating balance. Gorman Jewels borrows $480,000 at a 8 percent stated APR. What is the effective interest rate on the loan? What is the effective interest rate (Round answer to 2 decimal places, e,g. 12.25%.)
The interest rate on a $100,000 loan is 7.2% compounded semiannually. The monthly payments on the loan are $700. Do not round intermediate calculations. Round the PMT and final answers to 2 decimal points. a) Calculate the interest component of Payment 221. b) Calculate the principal component of Payment 156. c) Calculate the final payment.
On March 1, 20x4, Popular Bank agrees to lend $100.00 to your company through a written contract for a 6-month note payable at 5% interest.a. Register the note to payb. Record interest expense
On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 30- day note with a face amount of $74,400. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 5%.
A $7,650.00 demand loan was taken out on March 4 at a fixed interest rate of 7.7% with fixed monthly payments of $1,200.00. The first monthly payment is due April 4 and the 4th of every month thereafter. Prepare a full repayment schedule for the loan. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance before Transaction Annual Interest Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance (-) Principal Balance after Amount Transaction Mar 4 $7,650.00 Apr 4 7.7% May 4 7.7% Jun 4 7.7% Jul 4 7.7% Aug 4 7.7% Sep 4 7.7% Oct 4 7.7%
On January 1, 20X1, Bouncy House, Inc. obtains a $50,000, 6 year, 8% installment note for the latest and greatest bouncy house. Bouncy House is required to make annual payments. The first payment occurs on December 31, 20X1. а. Calculate your annual payment amount. b. Create the loan amortization schedule (table). Record the first three journal entries. d. How much total interest does Bouncy House pay on this installment note? С.
Rakesh
Suppose Leonard, Nixon, & Shull Corporation’s projected free cash flow (FCF) for next year is $750,000, and FCF is expected to grow at a constant rate of 4% indefinitely. If the company’s weighted average cost of capital is 10%, what is the value of its operations? a. $18,750,000 b. $12,500,000 c. $7,500,000 d. $13,000,000 e. $10,833,333
On January 26, Nova Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $ \$ 44, 400 $. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of $8\% $. b. Determine the proceeds of the note, assuming the note is discounted at $8\% $,
West County Bank agrees to lend Wildhorse Co. $472000 on January 1. Wildhorse Co. signs a $472000, 6%, 6-month note. What entry will Wildhorse Co. make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Notes Payable 486160 Cash 486160 Interest Payable 7080 Notes Payable 472000 Interest Expense 7080 Cash 486160 Notes Payable 472000 Interest Payable 14160 Cash 486160 Interest Expense 14160 Notes Payable 472000 Cash 486160
On April 1, Year 1, Halo Co. issued a $5,000 face value discount note to the Capri Bank. The note had a 12 percent discount rate and a one-year term. 8. The amount of cash Halo received on April 1, Year 1, was a. $5,000. b. $4,250. c. $4,400. d. $5,500. 9. The total carrying value of Halo’s liabilities on December 31, Year 1, would be a. $5,600. b. $5,000. c. $5,450. d. $4,850. 10. If Halo Co. earned $2,000 of revenue in Year 1, the amount of net income would be a. $2,000. b. $1,550. c. $1,400. d. $1,850.
$120,000 of its accounts receivable to 2nd National Bank as collateral for a $70,000 loan due August 1 of the same year. The assignment agreement calls for Bay Co. to continue to collect the receivables. The bank assesses a finance charge of 3% of the accounts receivable. The interest rate on the loan is 8% which is a realistic interest rate for this type of loan. Prepare the journal entry that Bay Co. would make on February 1 Prepare the journal entry for Bay's collection of $50,000 of the receivables between February 1 and July 31. Prepare the journal entry to record Bay Co.'s payment to the bank.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS