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vlada-n [284]
3 years ago
12

A firm has borrowed $5,000,000 for 3 years at 10% interest, compounded annually. It makes no payments until the loan is due, and

then pays the loan off as a lump sum. What is the payoff amount at the end of year 3?
Business
1 answer:
algol [13]3 years ago
4 0

Answer:

$6,655,000

Explanation:

A = P(1\ +\ r)^{n}

wherein, A= Amount

              P= Principal

              R= Rate of interest per annum

              n = term to maturity

Pay off amount at the end of year 3 = $5,000,000(1\ +\ .10)^{3}

Amount = $5,000,000 × 1.331 =  $ 6,655,000

Amount due of a borrowing is equal to the money borrowed initially compounded at a rate of interest for a known period.

Above. rate of interest is 10%, since the money has been repaid only upon due date, three year compounding of the said sum at 10% per annum rate of interest yields the payoff amount which is $6,655,000

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Answer:

C. financial intermediation.

Explanation:

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A financial intermediary also helps in facilitating the diverse needs of lenders and borrowers

The funds are raised from people who wants to deposit the money.

6 0
3 years ago
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MA_775_DIABLO [31]
I have personally done that before so yes I think that it's fine to switch around a few words here and there.


4 0
2 years ago
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What should be the current price of a share of stock if a $5 dividend was just paid, the stock has a required return of 20%, and
Gala2k [10]

Answer:

Current Price of the Share Stock is $ 37.86 (D)

Explanation:

Using dividend valuation method with a constant growth rate assumption, share price is calculated as : Po =D1/(Ke-g).

Where;  Po ⇒Market Value excluding any dividend currently payable

            D1= Do(1+g)⇒Expected dividend in one year's time

            Ke =Required rate of return by shareholders

             g= Dividend growth rate

<u>Calculation</u>

D1 = 5(1+0.06)= $5.3

Hence, Po= 5.3/(0.20-0.06)

            Po=$37.86

The share price is expected to reflect the future expected stream of income i.e  dividends and capital gains ,discounted at an appropriate cost of capital.

Some of the assumptions of dividend valuation method include but not limited to the following:

- it assumed that investors act rationality and in the same way ;

-the dividend either show growth or no growth;

-the discount rate used exceeds the dividend growth rate.

5 0
3 years ago
Benny Company budgeted 610 pounds of direct materials costing​ $18.00 per pound to make​ 8,000 units of product. The company act
docker41 [41]

Answer:

-$720 unfavorable

Explanation:

The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $18 per pound × (610 pounds - 650 pounds)

= $18 per pound × -40 pounds

= -$720 unfavorable

Simply we take the difference between the standard quantity and the actual quantity and then multiply it by the standard price so that the correct value can come

6 0
3 years ago
Tyler's event planning company hired a new marketing assistant.He says he is a "big picture person",not a detail-oriented person
Assoli18 [71]

Answer:

D) Stay strategic but also stay on top of tactical

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Since in the question it is mentioned that the event planning hired a new marketing assistant also he informed that he is a large picture person not a comprehensive oriented person

So here the Tyler determine the needs of a new assistant as both the components of strategic and the tactical is required to become the plan successfully

Therefore the option D is correct

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2 years ago
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