Tus the total price is 660 and terry can pay it off in 12

Assignment Help Finance Basics
Reference no: EM13478349

Terry Martinez is considering taking out a loan to purchase a desk. The furniture store manager rarely finances purchases, but will for Terry "as a special favor." The rate will be 10% per year, and because the desk costs $600, the interest will come to $60 for a one-year loan. Thus, the total price is $660, and Terry can pay it off in 12 installments of $55 each. Use the interest rate of 10% per year to calculate the net present value (NPV) of the loan? Based on this interest rate, should Terry accept the terms of the loan.

Reference no: EM13478349

Questions Cloud

Suppose that your aunt sold her house on december 31 and : assume that your aunt sold her house on december 31 and that she took a mortgage in the amount of 10000 as part of the
Gary whitmore is a high school sophomore he currently has : computing annuity payments gary whitmore is a high school sophomore. he currently has 7500 in a savings account that
Christine is a new homebuyer she wants to make sure that : christine is a new homebuyer. she wants to make sure that she incorporates the cost of maintenance into her decision.
Given the following information prepare a statement of cash : given the following information prepare a statement of cash flows. increase in accounts receivable 25 increase in
Tus the total price is 660 and terry can pay it off in 12 : terry martinez is considering taking out a loan to purchase a desk. the furniture store manager rarely finances
Your last deposit will be less than 1250 if less is : you need to accumulate 10000. to do so you plan to make deposits of 1250 per year with the first payment being made a
To complete the last year in business school and then go : to complete your last year in business school and then go through law school you will need 10000 per year for 4 years
It also experienced an increase in current assets of 150000 : during the year xerox inc. experienced an increase in net fixed assets of 300000 and had depreciation of 200000. it
Trees will mature in 10 years at which time : washington-pacific invests 4 million to clear a tract of land and to set out some young pine trees. the trees will

Reviews

Write a Review

Finance Basics Questions & Answers

  What roles do you think the federal reserve played

What roles do you think the Federal Reserve played in the manipulation of prime rates that may have partially contributed to the failure of the U.S. banking system in 2008?

  Some may argue that the production-line approach may not

1.some may argue that the production-line approach may not treat the process as a service process but as what type of

  Q cavo corporation expects the ebit of 23000 every year

q. cavo corporation expects the ebit of 23000 every year forever. company presently has no debt also its cost of

  What is the company inventory turnover ratio

What is the firm's investment in accounts receivable? c. What is the company's inventory turnover ratio? d. Identify three ways in which the company could reduce its cash conversion cycle? What are the possible risks of reducing it?

  What rate should the firm use to discut projects cash flow

If he firm is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discut the projects cash flow?

  What are a chief financial officerrsquos cfo two roles use

f1a. different financial institutions offer a variety of similar services but with different levels of competence. what

  What are some of the tools a manager may use in helping

What are some of the tools a manager may use in helping an investor achieve his or her financial goals.

  Calculate arithmetic average return

You've observed the following returns on Crash-n-Burn Computer's stock over the past 5 years: 115, -115, 18%, 23 percent, and 10%.

  Present value of lump-sum future cash receipt

Supposing that the retirement benefit is the only consideration in making retirement decision, should Ms. Pena accept her employer's offer? Identify the factors which cause the present value of retirement benefits to be less then $500,000.

  What is jack weighted average cost of capital

The U.S. Treasury bill is yielding 6 percent and the market risk premium is 9 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?

  What would the sofa cost to buy based on the foregoing

You lease a sofa for 4 years. APR is 11%. Annual payments starting up front at $180 (basically, $15 per month). There is a buyout option at the end of the lease for $600. What would the sofa cost to buy based on the foregoing?

  What is the payback period without discounting cash flows

Consider the following tem-year project. The initial after-tax outlay or after-tax cost is $1,000,000. The future after-tax cash inflows each year for years 1 through 10 are $200,000 per year. What is the payback period without discounting cash fl..

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