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Problem 6-18 Interest costs under alternative plans (LO6-3] Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: January February $8,100 2,100 3,100 April May $8,100 9,100 4,100 March June Short-term financing will be utilized for the next six months. Projected annual interest rates are: January February March 5.08 April Мay June 12.0% 6.0% 12.0% 12.0% 9.0% a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments

Problem 6-18 Interest costs under alternative plans (LO6-3] Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: January February $8,100 2,100 3,100 April May $8,100 9,100 4,100 March June Short-term financing will be utilized for the next six months. Projected annual interest rates are: January February March 5.08 April Мay June 12.0% 6.0% 12.0% 12.0% 9.0% a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments

Essentials Of Investments
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
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Problem 6-18 Interest costs under alternative plans [LO6-3] Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: $8,100 April Мay January $8,100 February 2,100 9,100 4,100 March 3,100 June Short-term financing will be utilized for the next six months. Projected annual interest rates are: April Мay 12.0% January February March 5.0% 6.0% 12.0% 9.0% June 12.0% a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments
Transcribed Image Text:Problem 6-18 Interest costs under alternative plans [LO6-3] Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: $8,100 April Мay January $8,100 February 2,100 9,100 4,100 March 3,100 June Short-term financing will be utilized for the next six months. Projected annual interest rates are: April Мay 12.0% January February March 5.0% 6.0% 12.0% 9.0% June 12.0% a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments
b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments b-2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar interest payments be larger or smaller than with the short-term financing plan? O Smaller O Larger
Transcribed Image Text:b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments b-2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar interest payments be larger or smaller than with the short-term financing plan? O Smaller O Larger
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