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3 years ago

The amount borrowed when taking out a loan

Business

1 answer:

ankoles [38]3 years ago

6 0

Answer:

What is the cost of borrowing?

The maximum amount participants may borrow from their plan is 50% of the vested account balance or $50,000, whichever is less. If the vested account balance is less than $10,000, you can still borrow up to $10,000.

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When Palm, Inc. acquired its 100% investment in Star Co., a foreign entity, the excess of cost over book value was 10,000 FC. Th

saul85 [17]

Answer:

A. debit to Patent for 10,000FC multiplied by the current exchange rate.

Explanation:

Since the excess of cost over book value was 10,000FC and this excess was traceable to a 10-year patent.

The elimination entry to amortize the excess will include a debit to Patent for 10,000FC multiplied by the current exchange rate assuming the foreign entity's local currency is its functional currency.

3 0

3 years ago

A company issues $15,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2019. Interest is paid on June 30 and December 31. T

shutvik [7]

Answer:

$14,747,642

Explanation:

Data provided in the question

Issued amount = $15,000,000

Coupon rate = 7.8%

Time period = 20 years

Yield to maturity is 8%

So for computing the carrying value of the bonds

First we have to compute the discount amortization for 3 years which is shown below:

= ($15,000,000 - $14,703,108) ÷ 20 years × 3 years

= $44,533.80

So, the carrying value of the bonds

= $14,703,108 + $44,533.80

= $14,747,642

3 0

2 years ago

Suppose that you just paid $76,000 for a security that will make its first payment to you in 7 years from today. It will continu

iogann1982 [59]

Answer:

$5,346.98

Explanation:

Initial cash flow = 76,000

Discount rate = 5%

Suppose the C.F. in the 7th year is x which will flow till perpetuity

Present value of annual cash flow till perpetuity = Annual cash flow / Discount rate

PV at the 7th year = x/0.05

Discount factor = (1 + r)^n

Discount rate = 5%

Years D. factor Cash flows

0 0 76,000

1 0.952381 -

2 0.907029 -

3 0.863838 -

4 0.822702 -

5 0.783526 -

6 0.746215 -

7 0.710681 x/0.05

So, 76000 = 0.710681 *(x/0.05)

76000 / 0.710681 = x / 0.05

x = 76000 / 0.710681 * 0.05

x = 5346.98408990813

x = 5346.98

Hence, if the interest rate is 5%, $5346.98 will be received annually from the 7th year

7 0

3 years ago

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the res

vladimir1956 [14]

Answer:

a) 12.23%

b) 12.94%

c) 14th month payment interest = $157.33

14th month principal = $369.50

d) 18th month payment interest = $142.04

18th month payment interest = $384.79

e) 22nd month payment interest = $126.12

22nd month payment interest = $400.71

Explanation:

price of truck = $15000

down payment = $1000

Loan amount = $14,000

assume monthly interest rate = r%

Loan amount after 1 year will be = 14000 * (1+r%)12

next we will determine the annuity factor = [ (1/r)-[(1/r)*(1/ (1+r)t)] ]

r = periodic interest rate , t = number of payments

monthly loan payment = $14000*(1+r%)12 / [ (1/r)-[(1/r)*(1/ (1+r)36)] ]

hence r = 1.019%

a) nominal interest rate

= 1.019% *12 = 12.23%

b) effective interest rate

= (1+1.019%)^12 -1 = 12.94%

attached below is the Amortization schedule

c) 14th month payment interest = $157.33

14th month principal = $369.50

d) 18th month payment interest = $142.04

18th month payment interest = $384.79

e) 22nd month payment interest = $126.12

22nd month payment interest = $400.71

3 0

2 years ago

Assume the world market for oil is competitive and that the marginal cost of producing (extracting and bringing to market) ano

xz_007 [3.2K]

Answer:

The economic surplus will decrease by $2.20

Explanation:

$81.40 and $79.20 are <em>marginal </em>cost and benefit, which are the changes to total costs and total benefits due to producing and consuming one additional barrel of oil.

They can be used to calculate <em>change </em>to economic surplus, which is the change to the net economic value received by society, which is given by:

marginal benefit - marginal cost = $79.20 - $81.40 = - $2.20

7 0

3 years ago