Present value of multiple annuities

Assignment Help Financial Management
Reference no: EM131012345

Present Value of Multiple Annuities A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $1,100 per month for the next three years and then $2,100 per month for the two years after that. If the bank is charging customers 6.75 percent APR, how much would it be willing to lend the business owner?

rev: 02_02_2012, 12_17_2015_QC_CS-33412

$6,885

$106,689

$102,000

$74,182

Reference no: EM131012345

Questions Cloud

In what instantaneous direction should you move : At what rate is your height on the surface changing at this point if you are walking toward x = 400 y = 200? In what (instantaneous) direction should you move in order to descend at the greatest rate?
Kelly personal construct theory of personality : An explanation of two constructs, based on Kelly's Personal Construct Theory of Personality, that you use to categorize, understand, and/or predict outcomes when you are meeting new people in the workplace or social situations
Duration of two-year bond that pays an annual coupon : What is the duration of a two-year bond that pays an annual coupon of 12 percent and has a current yield to maturity of 14 percent? Use $1,000 as the face value.
How and when did slavery start in america : Investigate the history of slavery and discuss the ways in which this history impacts contemporary society
Present value of multiple annuities : Present Value of Multiple Annuities A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $1,100 per month for the next three years and then $2,100 per month for the two years after that. If the bank i..
What role does ethics play in conscious capitalism : What role does ethics play in conscious capitalism and how do the ethics of conscious capitalism impact management tactics within an organization
Ways of organizing information that you take in from world : Do you find that your thoughts, predictions, or ways of organizing information that you take in from the world, influence your behavior in certain circumstances
Management to execute a strategic plan : What is necessary in the way of leadership and management to execute a strategic plan? Identify culture, decision-making processes, team creation, etc. Be creative and think outside the box.
Compute the present value of deposit in year : Compute the present value of a $4,900 deposit in year 1 and another $4,400 deposit at the end of year 4 using an 8 percent interest rate.

Reviews

Write a Review

Financial Management Questions & Answers

  What was the change in non-cash assets

During a given fiscal year, a firm's cash position changed by $3,403; liabilities changed by $25,432 and shareholder's equity changed by $17,341. What was the change in non-cash assets?

  Forecast the percentage of administrative expenses

The Seneca Children’s Fund (SCF) is a local charity that runs a summer camp for disadvantaged children. The fund’s board of directors has been working very hard over recent years to decrease the amount of overhead expenses, a major factor in how char..

  Cash budget-ending balance in accounts payable

ABC Corporation began operations on January 1st of this year with a cash balance of $250,000. ABC had sales of $200,000 for the month of January, all on credit. ABC allows its customers 30 days to pay. ABC's expenses for January equal $150,000, and A..

  What is the approximate yield to maturity

What is the approximate yield to maturity for a $1000 par value bond selling for $925 that matures in 8 years and pays a 10 percent coupon that is paid semiannually?

  Rust bucket motor credit corporation

Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of Rust Bucket Motor, offered some securities for sale to the public on March 28, 2008. Under the terms of the deal, RBMCC promised to repay the owner of one of these securities $100,000 on M..

  Decided to decrease the firms annual dividend

Horseshoe Stables is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $0.90 a share but all future dividends will be decreased by 10 percent annually. What is a sh..

  What is the companys cost of preferred stock

Bosio Inc.'s perpetual preferred stock sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's..

  What is the implied yen-dollar exchange rate at maturity

A four-year 3 percent Euro yen bond is selling at par. A "comparable risk" four-year 2.50 percent yen/dollar dual-current bond pays $800 at maturity per ¥100,000 of face value. The dual-currency bond is selling for ¥87,500 at the moment. What is the ..

  Determine additional cash management techniques

What are some ways in which a firm can improve its cash position? What are some ways that a firm can harm its cash position? Conduct your own research to determine additional cash management techniques.

  Hedge fund failures

Hedge fund Failures

  Yield to call-yield to maturity and market rates

Absalom Motors's 15% coupon rate, semi annual payment, $1,000 par value bonds that mature in 30 years are callable 4 years from now at a price of $750. The bonds sell at a price of $1,300, and the yield curve is flat. Assuming that interest rates in ..

  What would the consequences of such a decision be

Loan Payments You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?

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