Describe the effect of the purchase of machinery for cash

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Reference no: EM131976303

1. Identify which of the following statements accurately describe the effect of the purchase of machinery for cash:

A) Both net income and current assets decrease.

B) Both net income and non-current assets decrease.

C) Current assets increase and non-current assets decrease.

D) Current assets decrease and non-current assets increase.

2. Mr. Smith is purchasing a $170000 house. The down payment is 20% of the price of the house. He is given the choice of two mortgages:

(A) a 25-year mortgage at a rate of 6%. Find:

(i) The monthly payment: $ (3 decimal place)

(ii) The total amount of interest paid: $ (3 decimal place)

(B) a 15-year mortgage at a rate of 6%. Find:

(i) The monthly payment: $ (3 decimal place)

(ii) The total amount of interest paid: $ (3 decimal place)

Reference no: EM131976303

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