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Elenna [48]
3 years ago
6

Sam is comparing the costs of two loans. The principal amount of each loan is $5,000. One is due in one year and the other is du

e in four years. Both have the same stated rate of annual interest. Which of the following is true
Business
2 answers:
liraira [26]3 years ago
7 0

Answer:

the interest charges for the one-year loan will be lower than the interest charges for the four-year loan

Brilliant_brown [7]3 years ago
6 0

Answer:

The interest charges for the one-year loan will be lower than the interest charges for the four-year loan

Explanation:

Given two different with the same principal amount and the same interest rate, you will always pay less interests for the shorter loan. This is true for every loan simply because you are paying back the money in less time and interest is charged on the amount of time it takes you to pay the loan.

For example, I lend you $100 at 12%. Since it is a small amount of money, you will pay it back in 1 month and the total payment will be $101. But if you need more time you can pay me $1 in interest for the first month and $101 at the end of the second month. If you pay me back in two months, you will have paid $2 in interest vs. $1 if you had paid me back in just one month.  

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3 years ago
An advantage of a sole proprietorship is that
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3 years ago
West Coast Ltd. wants to issue preferred stock that pays an annual dividend of $6.80 a share. The company has determined that st
egoroff_w [7]

Answer:

The offer price will be $55.51

Explanation:

The constant cash flow over a indefinite period of time is the perpetuity. The dividend payment on the preferred is also considered as perpetuity because it pays the constant amount of dividend and there is no time limit for the payment.

Value of the preferred share can be determine by following formula

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4 years ago
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dalvyx [7]
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4 years ago
Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years. The required return is 9% an
zhannawk [14.2K]

The payback period for the investment is 4 years.

<h3>What is the payback period?</h3>

The  payback period is a capital budgeting method used to determine the profitability of an investment. It determines the number of years it would take to recover the amount invested in a project from its cumulative cash flows.

payback period = amount invested / cash inflow

$100,000 / $25,000 = 4 years

To learn more about the payback period, please check: brainly.com/question/26068051

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