Qpaolo currently has 100000 invested in bonds that earn him

Assignment Help Business Economics

Reference no: EM13351814

Q. Paolo currently has 100,000 invested in bonds that earn him 10 percent interest per year. He wants to open a pizza restaurant and is considering either selling the bonds and using the 100,000 to start his restaurant or borrowing the 100,000 from a bank which would charge him an annual interest rate of 7 percent. He finally decides to sell the bonds and not take out the bank loan. He reasons, "Because I already have the $100,000 invested in the bonds, I don't have to pay anything to use the money. If I take out the bank loan, I have to pay interest, so my cost of producing pizza will be higher if I take out the loan than if I sell the bonds. "What do you think of Paolo's reasoning?

Reference no: EM13351814

Questions Cloud

During 2011 and 2012 faulkner manufacturing used the : during 2011 and 2012 faulkner manufacturing used the sum-of-the-years-digits syd technique of depreciation for its

Q if one draws mc curves pre and post innovation as well as : q. if one draws mc curves pre and post innovation as well as the marginal revenue line for a monopoly and the mr in a

Q your friend has now joined a lab that studies vesicle : q. your friend has now joined a lab that studies vesicle budding from the golgi and has been given a cell line that

Check a publicly held multinational company of your choice : check a publicly held multinational company of your choice. research its filings to the sec mostly the 10-k and 10-qs.

Qpaolo currently has 100000 invested in bonds that earn him : q.paolo currently has 100000 invested in bonds that earn him 10 percent interest per year. he wants to open a pizza

Q a young entrepreneur is considering buying or leasing a : q. a young entrepreneur is considering buying or leasing a xerox machine for a photocopying business office. the cost

Q1 workplace stress and aggression please respond to the : q1. workplace stress and aggression please respond to the following-analyze the stressors employees might experience as

Q1 predict what would happen to the equilibrium price of : q1. predict what would happen to the equilibrium price of marijuana if it were legalized. use demand amp supply

Q1 i asked for a solution for the chase manhattan bank case : q1 i asked for a solution for the chase manhattan bank case study and was wondering how my tutor was doing on it. the

User Account

All Pages