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LekaFEV [45]
3 years ago
5

Donaldson's purchased some property for $1.2 million, paid 25 percent down in cash, and financed the balance for 12 years at 7.2

percent, compounded monthly. What is the amount of each monthly mortgage payment
Business
1 answer:
Leya [2.2K]3 years ago
6 0

Answer:

$9,352.27

Explanation:

25% of 1.2million

25/100×$1,200,000

=$900,000

Monthly mortgage Payment (p)=r(PV)/{1-(1+r)^-n}

Present value (PV)=$900,000

r=7.2%/12

=7.2/100÷12

=0.072/12

r=0.006

n= 144(12 years×12months)

P=r(PV)/{1-(1+r)^-n}

=0.006×$900,000/{1-

(1+0.006)^-144

=$5,400/{1 - (1.006)^-144}

=$5400/{1 - 0.4226}

=$5,400/0.5774

=$9,352.27

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3 years ago
The​ after-tax cost of debt is higher than the​ before-tax cost of debt. True or False
olasank [31]

Answer:

False

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The after tax cost of the debt = $1,000,000 x 7% x (1 - tax rate) = $1,000,000 x 7% x (1 - 21%) = $1,000,000 x 7% x 0.79 = $55,300

5 0
3 years ago
A fry cook at a fast food
scZoUnD [109]

Answer: a) call his manager

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4 0
1 year ago
A taxable bond has a yield of 8%, and a municipal bond has a yield of 6%. At what tax bracket, would you be indifferent between
Nataliya [291]

Answer: 25%

Explanation:

Municipal bonds are tax-free which means that the tax bracket that would make you indifferent between the 2 bonds would be the one that brings the after-tax yield on the taxable bond to the same yield as the Municipal bond.

Assume this tax rate to be x.

8% * ( 1 - x) = 6%

8% - 0.08x = 6%

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x = (8% - 6%) / 0.08

x = 25%

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