Answer:
$50.47
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = - ($678 + $58 ) = -736
Cash flow in year 1 - 4 = $173
Cash flow in year 5 = $173 + $144
I = 8.1
NPV = 50.47
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
A sort of financial product sold to investors is a corporate bond, which is issued by a business. The investor receives a predetermined amount of interest payments at either a fixed or variable interest rate in exchange for providing the firm with the money it requires.
The bond "reaches maturity" when it stops making payments and the initial investment is refunded.
The ability of the corporation to repay the bond often serves as its security, and this ability is based on its expectations for future revenues and profitability. Physical assets of the corporation may occasionally be utilized as collateral.
A state, municipality, or county may issue municipal bonds as a debt security to pay for capital projects like building roads, bridges, or schools. They can be compared to loans given to local governments by investors.
Municipal bonds are particularly appealing to those in higher income tax brackets because they are frequently exempt from federal taxes and the majority of state and local taxes (for residents).
To learn more about Corporate Bond and Municipal Bonds here
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Answer:
$2,800
Explanation:
An interest only loan represents a type of loan offer where a borrower is only expected to pay the interest either for some of the term of the loan as agreed or for all of the terms of the loan. However, the principal amount that is collected remains constant all through the agreed interest -only period.
Since the loan obtained by John's Auto Repair is Interest Only, it means that the principal of $35,000 remains constant.
Hence, in the 8th year, John is expected to pay only the interest for the period =
0.08 x $35,000
= $2,800
Answer:
Option (C) is correct.
Explanation:
Given that,
Cash amount loaned = $36,000
Rate of interest on note = 5%
Time period: From September 1, Year 1 to December 31, Year 1 = 4 months
Amount of Interest revenue:
= Cash amount loaned × Interest rate × Time period
= $36,000 × 0.05 × (4/12)
= $36,000 × 0.05 × (1/3)
= $599.9 or $600
There is no cash flow from operating activity in respect of loan given to another company and interest revenue accrued on loan amount.
