Answer:
$338,712
Explanation:
we must first calculate the monthly payment using the present value of an annuity formula:
present value = monthly payment x annuity factor
present value = $340,000
PV annuity factor, 0.529167%, 420 periods = 168.38268
monthly payment = $340,000 / 168.38268 = $2,019.21
Since the monthly payment was actually higher than $1,800, the balloon payment will be almost $340,000
I prepared an amortization schedule using an excel spreadsheet. During the first years, the principal is only decreasing by $1 each month
It is given that Joseph purchased 100 shares of ABCD Growth Fund for a price of $10.00 per share with a total investment of $1,000. At the end of the year he sold his investment for $11.20 per share. Find the total capital gain.
To get the capital gain, compute the total price in which Joseph sold his investment.
$11.20 x 100 = $1,120
Subtract the answer to the total price bought by Joseph
$1,120 - $1,000 = $120
The total capital gain is $120
Answer:
(i) 900 CDs
(ii) Greater than; $1,650
Explanation:
(1) Break-event point will be when the contribution margin from total sales is equal to fixed costs,
Contribution Margin = Selling price - variable cost
= $(21.5 - 9.5)
= $12
Contribution Margin *Number of CDs sold = $10,800
Break-even point for Studio A = 10,800 ÷ 12
= 900 CDs
(2) Studio A would be more profitable when the extra profit earned from per unit sale of CD exceeds the extra fixed cost given in Studio A.
Extra Contribution margin in Studio A = $(12-10)
= $2
Extra Fixed cost in Studio A = $(10,800 - 7,500)
= $3,300
Studio A should be chosen if sales is greater than (3300/2) = $1,650.
Answer:
Machine B has a higher NPV therefore should be produced
Explanation:
The machine with the higher Net Present Value (NPV) should be produced .
NPV of Machine A
PV of cash flow
PV of annual profit = A × (1- (1+r)^*(-n)/r
A- 92,000, n- 11, r- 12%
PV = 92,000 × (1- (1.12^(-11)/0.12 = 546268.32
PV of salvage value = 13,000× 1.12^(-11)= 3737.189
NPV = 546268.320 + 3737.189 -250,000 = $300,005.50
NPV of Machine B
A- 103,00, n- 19, r- 12%
PV = 103,000 × (1- (1.12^(-19)/0.12= 758675.0165
Pv of salvage value = 26000× 1.12^(-19)= 3018.776199
NPV =758675.0165 + 3018.77 -460,000 = $301,693.79
Machine B has a higher NPV , therefore should be produced.
