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3 years ago

What percentage of the loan does PMI insure to protect the lender in case the borrower defaults on the loan?

Business

1 answer:

KIM [24]3 years ago

6 0

20 percent of the loan does PMI insure to protect the lender in case the borrower defaults on the loan.

Explanation:

PMI insurance essentially protects lendingers in the case of homeowners defaulting on their loans, as the homeowner has a shareholding of less than 20 percent.

PMI does not always protect the buyer, but it does provide you with a way of becoming a domestic owner unless you have a minimum payment of 20 percent.

This is a kind of conventional mortgage insurance insurers ask homebuyers to reduce their purchase price by less than 20%. You will need an insurance premium for your mortgage — the amount you earn PMI — though how you do this will vary with the creditor.

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On January 2, 2016, Alpha Company purchased a patent for $38,500 plus $2,000 in legal fees. On that date, the patent had a remai

Fittoniya [83]

Answer:

General Journal entry:

Account Debit Credit

Amortization expense $6,750

Accumulated Amortization $6,750

(patent)

Explanation:

Given Data:

Price of patent=$38,500

Legal fees=$2,000

legal Life=13 years

useful life=6 years

Required:

Journal Entry

Solution:

Amortization:

For intangible assets, amortization is the decrease in book value over the period of time. However intangible assets have no physical appearance and they do not face any damage like fixed assets but with the passage of time their value decrease.

Calculating amortization expense for one year:

Amortization expense= $\frac{Purchase\ Price+Legal\ Fees}{Useful\ Life}$

$Amortization\ expense=\frac{\$38,500+\$2000}{6}\\ Amortization\ expense=\$6,750$

General Journal entry:

Account Debit Credit

Amortization expense $6,750

Accumulated Amortization $6,750

(patent)

7 0

3 years ago

IBM expects to pay a dividend of $2 next year and expects these dividends to grow at 6% a year. The price of IBM is $90 per sha

Elena-2011 [213]

Answer:

Cost of equity = 8.22%

Explanation:

Cost of equity = Dividend per share /current market value + growth rate of dividend

Cost of equity = 2/90 + 6%

Cost of equity = 0.0222 + 6%

Cost of equity =0.0222 + 0.06

Cost of equity = 0.0822

Cost of equity = 8.22%

7 0

3 years ago

Land containing a mine having an estimated 1,000,000 tons of economically extractable ore is purchased for $375,000. after the o

Leokris [45]

Should your answr be a ratio it is 75/375

7 0

3 years ago

In each of the following situations, what type of unemployment is Melanie facing? Explain.a. After completing a complex programm

arlik [135]

Answer:

A. Frictional Unemployment

B. Structural Unemployment

C. Cyclical Unemployment

Explanation:

A. Frictional Unemployment refers to people moving between jobs which is the case for the first scenario

B. Structural Unemployment is a type of unemployment when structure of the economy changes and outsourcing also comes under this

C. Cyclical Unemployment is caused by the movements of business cycle people are laid off when economy is facing recession i.e decrease in investment.

7 0

3 years ago

If Abrams Company has an inventory turnover of 7.3 and a receivables turnover of 9.6, approximately how long is its operating cy

Leviafan [203]

Answer:

It is 16.9

Explanation:

Operating cycle = Inventory turnover + Receivable turn over - payable turnover

Hence, Operating cycle = 7.3+9.6

=16.9

Operating cycle implies how long it takes us to convert entire production process to cash .

It has an direct relationship with the level of working capital required. The higher the operating cycle, the higher the working capital investment required to keep the operation running.

A cash driven businesses like restaurant which hardly sell on credit will certainly have shorter operating cycle compared to a manufacturing company.

6 0

3 years ago