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Alice needed capital to expand his business. He borrowed a loan of $20,000,000 from the bank and the load would be compounded monthly at 4.5% p.a. immediately after the loan was incurred.
(a) Alice would repay the load by monthly payments for 10years, for a total of 120 payments.
(i) Compute the monthly payment
(ii) What was the total interest charged for this amortization?
(b)Due to financial reasons, Alice needed to defer the monthly payments. He would pay the first monthly payment starting from the end of the 49th month after the load was incurred.
(i) Calculate the revised monthly payment if Alice would finish paying the loan in 6 years, for a total of 72 payments
(ii) Find the total interest charged for the whole loan.
Using the situation from SLP2, recall that you are deciding between two investments. However, they each require a different initial investment amount. Real estate development. This is a risky opportunity with the possibility of a high payoff, but als..
Stephen plans to purchase a car 5 years from now. The car will cost $55,339 at that time. Assume that Stephen can earn 5.16 percent (compounded monthly) on his money. How much should he set aside today for the purchase?
You are considering the purchase of crown bakery, inc common stock that just paid a dividend of $3.77 per share. You expect the dividend to grow at a rate of 3.28 percent per year, indefinitely. You estimate that a required rate of return of 10.25 pe..
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Defines how solvency and liquidity differ and provides an example of two companies. As a financial manager, what can you do to make sure your company stays solvent and is not too liquid?
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Seven years ago XYZ International issued some 31-year zero-coupon bonds that were priced with a market's required yield to maturity of 12 percent and a par value of $1,000. What did these bonds sell for when they were issued?
The following transactions pertain to 2012, the first-year operations of Hall Company. All inventories was started and completed during 2012. Assume that all transactions are cash transactions. 1. Acquired $4,900 cash by issuing common stock.
write 400ndash600 words that respond to the following questions with your thoughts ideas and comments. this will be the
An unlevered firm has a value of $700 million. An otherwise identical but levered firm has $130 million in debt at a 5% interest rate. Its cost of debt is 5% and its unlevered cost of equity is 11%. No growth is expected. Assuming the corporate tax r..
Consider the following limit-order book for a share of stock. The last trade in the stock occurred at a price of $55. Limit Buy Orders Limit Sell Orders Price Shares Price Shares $ 54.75 500 $ 55.25 200 54.50 400 55.50 200 54.25 500 58.75 300 54.00 2..
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