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solong [7]
3 years ago
13

You have an outstanding balance on your credit card of $10,000. You can pay off the balance if you make 36 monthly payments of $

350, starting next month. Alternatively, you can take out a bank loan today for $10,000 and pay off the credit card debt. The bank loan is paid with 36 monthly payments, starting next month. The bank loan charges 5% APR, compounded monthly.
Required:
1. If your savings account earns 4% APR compounded monthly, how much do you save in present value terms by using the bank loan to pay off the credit card debt?

Business
1 answer:
iVinArrow [24]3 years ago
7 0

Answer:

Our answer is attached below

Explanation:

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TH Manufacturers expects to generate cash flows of $129,600 for the next two years. At the end of the two years the business wil
arsen [322]

Answer:

Vo  = <u>C1  </u>    +        <u>C2 + V2</u>

        1 + k              (1 + K)2

Vo = <u>$129,600  </u> +   <u>$129,600 + $3,200,000</u>

        1 + 0.14            (1 + 0.14)2

Vo = $113,684.21  + $2,562,019.08

Vo = $2,675,703.29

The correct answer is C

Explanation:  

The current value of the business equals cashflow in year 1 divided by 1 + K plus the aggregate of cashflow and sales value in year 2 divided by 1 + k raised to power 2.

7 0
3 years ago
You are going to make an investment of $1000, and are considering 2 options: Option one is a zero-coupon 5-year bond of a compan
Andrei [34K]

Answer:

a. What is the expected return of the risky corporate bond over the 5-year holding-period (in %)?

expected return in $ = (50% x 20% x $1,000 x 4) + (50% x 35% x $1,000 x 4) = $400 + $700 = $1,100

holding period return = ($1,100 - $1,000) / $1,000 = 10%

b. What is its effective annual return?

(1 + 10%)⁰°² - 1 = 1.92%

b. What is its effective annual return?

  • 2. The government bond is the superior investment

The yield of he corporate bond is very low and the risk is too high.

8 0
3 years ago
Direct Materials Purchases Budget
dimaraw [331]

Answer:

Since there is not enough room here, I prepared an excel spreadsheet

Explanation:

Download pdf
6 0
3 years ago
High-school athletes who skip college to become professional athletes a. obviously do not understand the value of a college educ
Gnesinka [82]

Answer:

C. Understand that the opportunity cost of attending college is very high.

Explanation:

The reason is that the colleges costs very high both the money and time. However the person can also earn while pursuing their dreams because it has greater value for them if they have potential for growth in games. So they prefer to follow their dreams rather investing on their higher education.

8 0
3 years ago
Read 2 more answers
Here your picture!yay
lapo4ka [179]

very pretty but dont have that money :(

3 0
2 years ago
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