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sweet-ann [11.9K]
3 years ago
6

You have just signed a contract to purchase your dream house. The price is $140,000 and you have applied for a $110,000, 30-year

, 4.5 percent loan. Annual property taxes are expected to be $2,100. Hazard insurance will cost $600 per year. Your car payment is $450, with 36 months left. Your monthly gross income is $4,000. Calculate the total obligations (back-end) ratio.
Business
1 answer:
zimovet [89]3 years ago
3 0

Answer:

obligation ratio: 0.3081    = 30.81%

Explanation:

Total oblication will include all the payment:

property taxes: 2,100 / 12 =   175

insurance:          600 / 12 =     50

car monthly payment:          450

mortage monthly payment: 557.35

Total obligation:                 1,232.35

<u>mortgage monthly payment:</u>

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV   110,000

time 360 (30 years x 12 months per year)

rate 0.00375 (0.045 divide into 12 months to get the monthly rate)

110000 \div \frac{1-(1+0.00375)^{-360} }{0.00375} = C\\

C   557.354

<u>total obligation ratio:</u>

1,32.35 / 4,000 =  0.3081  

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Anchor Company purchased a manufacturing machine with a list price of $93,000 and received a 2% cash discount on the purchase. T
r-ruslan [8.4K]

Answer:

$100,340

Explanation:

<em>The amount of cost recorded in the asset account would be:</em>

List price                                    $93,000

Less: Discount ($93,000*2%)   $1,860

Add: Freight                               $3,800

Add: Installation&Testing          <u>$5,400 </u>

Cost of the machine                 <u>$100,340</u>

Note: Insurance cost is not included in the cost of the machine

6 0
3 years ago
g 3) You are interested in purchasing an apartment complex for $2,000,000 that has Net Operating Income (NOI) of $120,000 and is
Paraphin [41]

Answer:

the cap rate is 6%

Explanation:

The computation of the cap rate is as follows:

= Net operating Income ÷ Current market value of property

= $120,000 ÷  $2,000,000

= .06

=  6%

Hence, the cap rate is 6%

We simply divided the net operating income from the Current market value of property so that the cap rate could come

4 0
2 years ago
Ace Industries has current assets equal to $5 million. The company's current ratio is 2.0, and its quick ratio is 1.6. What is t
Travka [436]

Answer:

=1.25

Explanation:

Current ratio= current asset/ current liabilities

Current ratio= $5 million./ Current Liabilities

Cross multiply we have

But current ratio is 2.0

2= 5/ current liabilities

current liabilities= 5/2

=2.5million

Quick ratio= current Asset- inventory/current liabilities

1.5=( 5- inventory)/2.5

Cross multiply we have

1.5×2.5= ( 5- inventory)

3.75= ( 5- inventory)

inventory= 5-3.75

=1.25

Therefore, the firm's level of inventories is 1.25

7 0
2 years ago
Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the S&amp;P 500 will sell at year-end at
Rus_ich [418]

Answer:

a. 9,50%

b. $47.09

Explanation:

a) Discount rate on the stock

Average Risk Premium of Stock = 7.60%

Current risk-free rate = 1.60%

Discount Rate = 7.60% + 1.90%

Discount Rate = 9.50%

b) Current Price = ($41 + $2) / (1 + 9.50%)^1

Current Price = $43 / (1.0950)^1

Current Price = $43 / (1.0950)^1

Current Price = $43 / 0.91324

Current Price = $47.0851035872278

Current Price = $47.09

Note: Stock price equals the present value of cash flows for a 1-year horizon (Fv + Dividend)/(1+ Discount rate)^n

6 0
3 years ago
Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it d
Murljashka [212]

Answer:

Related diversification

Explanation:

Related diversification

As the name indicate related diversification is related to expansion of  business in the  same  field to which it is currently working. This can be explained by one example. If any corporation are in a business of making computer parts and the very same corporation expand their business by  making related articles like calculator, smart watch etc. These all are come in the related diversification.

4 0
3 years ago
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