Amortizing a loan, Corporate Finance

Assignment Help:
Suppose you take out a loan of $10,000, repayable by five equal annual instalments. The interest rate is 10% per year.

(a) How much do you need to repay per year to the nearest cent if payments are due : (i) at the beginning of each year (ii) at the end of each year?

(b) Which loan in part (a) is preferable, (i) or (ii)? Explain your answer.

Related Discussions:- Amortizing a loan

Calculate the net present value, Here is the pro-forma income statement for...

Here is the pro-forma income statement for Semen Indonesia, an overseas venture that Cemex is planning to invest in.  In this exercise, you will need to evaluate the inve

IRR, A firm issues bonds with a coupon rate of 10%, paid annually, having a...

A firm issues bonds with a coupon rate of 10%, paid annually, having a par value of 1000, YTM of 8% and maturity of 10 years. What is the IRR of buying the bond today and selling

Dividend policy, the managing directors of three profitable listed companie...

the managing directors of three profitable listed companies discussed their company''s dividend policies. company A has deliberately paid no dividends for the past five years. comp

Review the existing legislation regulating banks entities, The Minister of ...

The Minister of Finance decides to review the existing legislation regulating banks and non-banking entities. You have been appointed as Advisor to the Minister to work on the pro

Capital structure, a)  Use excel of a financial calculator to estimate the ...

a)  Use excel of a financial calculator to estimate the IRR of the following business opportunity:  Initial cost of $100,000, expected pre-tax annual cash flows of $54,000 for the

Calculate the present value of a company''s bonds, 1. How do you calculate ...

1. How do you calculate the present value of a Company's bonds? 2. "An analysis of the magnitude and stability of cash flows comparative to fixed charges is very important in de

Net profit value & profitability index, hook industries is considering the ...

hook industries is considering the replacement of one of its old drill presses. three alternatives replacement presses are under consideration. the relevant cash flows associated w

How could phoenix activity be addressed, Q. How could phoenix activity be a...

Q. How could phoenix activity be addressed? A range of actions have been suggested to mitigate phoenix activity. These suggested actions were selected on the basis of: - pr

Project on corporate finance, develop a corporate finance project and diss...

develop a corporate finance project and dissices all ground of financials areas

Write Your Message!

Captcha
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