Answer:
I prepared an amortization schedule using an excel spreadsheet. The original monthly payment was $836.44. After the 120th payment, the remaining principal balance was $68,940.64. Since she didn't pay anything for 1 year, the new principal balance will be $68,940.64 x (1 + 8%) = $74,455.89
I prepared another amortization schedule for the remaining 9 years, and the monthly payment is $969.32. She will pay off the loan in 108 months.
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark">
pdf
</span>
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark">
pdf
</span>
A light-year is a unit of distance, and not a unit of time. That is like saying "School will be over in 3 kilometers!".
Answer:
a. A Ba1 corporate bond <u>2 (not investment grade)</u>
b. A ten-year BBB- corporate bond with a YTM of 7% <u>3 (medium risk but still investment grade)</u>
c. A secured loan from Argosy Gaming, which is a B- rated firm <u>4 (less risky since it is backed by a collateral)</u>
d. A senior subordinated bond from Argosy Gaming <u>1 (highest risk)</u>
Explanation:
There are two major bond rating agencies in the US: Moody's and Standard & Poor's.
Their rankings are very similar, although the letters vary a little:
AAA: safest
AA: low risk
A: low risk
BBB: medium risk
BB: a little bit more riskier
B: risky
CCC: very high risk
CC: even riskier
C: riskiest
D: junk, in default
Answer:
C. The firm is profitable because profit equals $27,500.
Explanation:
For computing the profit, the following formula should be used
Profit = Total revenue - total cost
where,
Total revenue = Number of units sold × market price
= 20,000 units × $15
= $300,000
And, the total cost would be
= Labor cost of the firm + total capital stock × given percentage
= $248,500 + $400,000 × 6%
= $248,500 + $24,000
= $272,500
Now the profit would be
= $300,000 - $272,500
= $27,500
