### What is interest rate-discounting this purchase transaction

Assignment Help Other Subject
##### Reference no: EM13319920

Answer the following questions related to Dubois Inc.

(a) Dubois Inc. has \$600,00 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides \$80,000 at the end of each year for 12 years, and the other is to receive a single lump sump payment of \$1,900,000 at the end of the 12 years. Which alternative should Dubois select? Assume the interest rate is constant over the entire investment.

(b) Dubois Inc. has completed the purchase of new Dell computers. The fair market value of the equipment is \$824,150. The purchase agreement specifies an immediate down payment of \$200,000 and semiannual payments of \$76,952 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction?

(c) Dubois Inc. loans money to John Kruk Corporation in the amount of \$800,000. Dubois accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Dubois needs money and therefore sells the note to Chicago National Bank, which demands interest on the note of 10% compounded semiannually. What is the amount Dubois will receive on the sale of the note?

(d) Dubois Inc. wishes to accumulate \$1,300,000 by December 31, 2020, to retire bonds outstannding. The company deposits \$200,000 on December 31, 2010, which will earn interest at 10% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that \$1,300,000 is available at the end of 2020. (The quarterly deposits will also earn at a rate of 10%, compounded quarterly.) (Round to even dollars.)

#### What is the mean extroversion score for blonds

Create a boxplot that displays the differences among the distributions for the three hair color groups. Remember to put your dependent variable in the "variable" box, and yo

#### Human need to build bonds and relationships

Describe the factors of attraction. What attracts us to one another? Why are we less likely to befriend someone from another culture than someone from a similar background w

#### Explanation of aspects of texas judicial system

How does due process in Texas's courts balance the rights on the individuals and the mores of the community? What are the advantages and disadvantages of Texas's Judicial Sele

#### Represents flows in macro-economy as closed system

In the textbook, there are two circular flow diagrams: One that represents the flows in the macro-economy as a closed system and one that represents the flows as an open sys

#### Does your gender affect way other people interact with you

How does your gender and the way you identify yourself affect how you interact with the world? How does it affect your relationships with others and the way you respond to l

#### Concerned with a childs moral development

Discuss whether our educational system should be concerned with a child's moral development or if children should be left to rely solely on their inner feelings for moral dire

#### Health care policy

Describe at least one health care policy measure designed to decrease hospitalization of nursing home residents. Are there any disadvantages or limitations of this policy?

#### Gender differences in ethical perspectives-virtuous behavior

Researchers have found that there are gender differences in ethical perspectives. Give an example of a gender difference that you have experienced that relates to a moral or