Ralston Consulting, Inc., has a $35,000 overdue debt with Supplier No. 1. The company is low on cash, with only $9,800 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways: Option 1: Pay $9,800 now and $33,250 when some large projects are finished, two years from today. Option 2: Pay $49,000 three years from today, when even larger projects are finished. Assuming that the only factor in the decision is the cost of money (8%) (Click here to see present value and future value tables) A. Calculate the present value of each option. Round your present value factor to three decimal places and final answer to the nearest dollar. Present value of Option 1 $fill in the blank 1 Present value of Option 2 $fill in the blank 2 B. Which option should Ralston choose? Option 1 or Option 2

Ralston Consulting, Inc., has a $35,000 overdue debt with Supplier No. 1. The company is low on cash, with only $9,800 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways: Option 1: Pay $9,800 now and $33,250 when some large projects are finished, two years from today. Option 2: Pay $49,000 three years from today, when even larger projects are finished. Assuming that the only factor in the decision is the cost of money (8%) (Click here to see present value and future value tables) A. Calculate the present value of each option. Round your present value factor to three decimal places and final answer to the nearest dollar. Present value of Option 1 $fill in the blank 1 Present value of Option 2 $fill in the blank 2 B. Which option should Ralston choose? Option 1 or Option 2

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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Please answer question (b)
New Venture Corporation has taken out a $5 million, 30-year, 10% mortgage on its new manufacturing facility. How much will New Venture pay each month to discharge this mortgage? How much of the first payment is for interest, and by how much does it reduce the balance owed ? How much of the second payment is for interest, and by how much does it reduce the balance owed ?
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The Fritzes are buying a house that sells for $107,000.The bank is requiring a minimum down payment of 20%.To obtain a 40-year mortgage at 9.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 20% down payment. c) Find the cost of 4 points on the mortgage. a) The required down payment is $ enter your response here.
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