Determine the firm''s annual loan payment

Assignment Help Finance Basics
Reference no: EM131111618

Liz Rogers just closed a $10,000 business loan that is to be repaid in three equal, annual, end-of-year payments. The interest rate on the loan is 13%. As part of her firm's detailed financial planning, Liz wishes to determine the annual interest deduction attributable to the loan. (Because it is a business loan, the interest portion of each loan payment is tax-deductible to the business.) 

a. Determine the firm's annual loan payment.

b. Prepare an amortization schedule for the loan.

c. How much interest expense will Liz's firm have in each of the next 3 years as a result of this loan?

Reference no: EM131111618

Questions Cloud

Figure out what tim''s monthly payment would be : Use a financial calculator or spreadsheet to help you figure out what Tim's monthly payment would be if the dealer were willing to finance the balance of the car price at a 9% annual rate.
Policy effects on the industry : Brief introduction outlining the intent of the policy and Policy effects on the industry
What is the difference between a thin and a thick lens : 1.) Explain in your own words  What is the difference between a thin and a thick lens?a) State the lens makers equation and explain all parameters involved.
What is the total angular distance they have traveled : Two cyclists of equal mass of 70kg arrive perpendicular to each other at an intersection and collide completely inelastically. Cyclist 1 was traveling at 15 km/h and cyclist 2 was traveling at 19 k/m. Describe their new velocity (0) just after col..
Determine the firm''s annual loan payment : Determine the firm's annual loan payment. Prepare an amortization schedule for the loan. How much interest expense will Liz's firm have in each of the next 3 years as a result of this loan?
Effective critical thinking and problem : 1. Can you think of other examples from your professional life where effective critical thinking and problem solving helped fix an issue within an organization?
Provide an opinion on pennypackers question : The HOA board has asked you to provide an opinion on Pennypacker's question. Would you recommend a full audit or a nonaudit attestation service? Explain why.
Inflation rate and work out a spending program : Assume a 4% inflation rate and work out a spending program for your retirement that will allow you to increase your expenditure in line with inflation.
Describe the key elements needed in a business plan : Does the company executive summary describe the key elements needed in a business plan?

Reviews

Write a Review

Finance Basics Questions & Answers

  Person in terms of risk management

This question basically from Finance. The question here is about a condition where a person living in an area with high risk. The best alternatives open to the person in terms of risk management as well as insurance have been stated in the solutio..

  What is net value of payments vs. receipts in today dollars

Carol Thomas will pay out $6000 at the end of the year 2, 8000 at the end of year 3 and receive 10000 at the end of year 4. With an interest rate of 13%, what is the net value of the payments vs. receipts in today's dollars?

  How large will your retirement account

Planning to make monthly deposits of 100 into a retirement account that pays 12 percent interest compounded monthly. if your deposit will be made one month from now, how large will your retirement account be in 17 years

  Necessity of attending the conference

Suppose that the corporation has as an integral funding strategy to their strategic plan that they will participate in an IPO in approximately twenty four months.

  What is the best definition of tier 1 regulatory

what is the best definition of tier 1 regulatory capital?a. equity capital retained earnings disclosed reservesb.

  What is the difference between short-term and long-term

What is the difference between short-term and long-term financing? How are the two approaches used to optimize the acquisition of funds?

  What was the amount of personal saving last year

Personal income amounted to $17 million last year. Personal current taxes amounted to $4 million and personal outlays for consumption expenditures, nonmortgage interest, and so forth were $12 million.

  Which one of the following is the risk arising from changes

Which one of the following is the risk arising from changes in value caused by political actions?

  Does the financial manager have a greater responsibility

Does the financial manager have a greater responsibility or a lesser responsibility for maintaining ethical corporate governance? Why or why not? What is or will be your approach to ethical corporate governance now or in the future?

  What is your effective borrowing rate

Suggest a strategy for borrowing the $100 million. What is your effective borrowing rate?

  Financial information about companies

1. Where do analysts get financial information about companies? What are their concerns about the information? 2. Financial analysts are generally optimists who believe what they're told. Right or wrong? Explain.

  Explaining cash management firm-s-opportunity cost is given

As the bank is also doing lot of record keeping, firm’s administrative cost would reduce by $2,000 per month. What suggestion would you provide firm with respect to proposed cash management suppose the firm’s opportunity cost is 12%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd