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3 years ago

When creditors make a decision about approving an individual for a credit card, they consider an individual’s _____.?

1 answer:

8 0

When creditors make a decision about approving an individual for a credit card, they consider an individual's Debt to Income Ratio.

The creditors consider ratio to give your credit score and to determine whether that debtor has the capability to pay back their Debt.

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Your firm spends $ 5 comma 200 every month on printing and mailing costs, sending statements to customers. If the interest rate

Korvikt [17]

Answer:

The present value for eliminating this cost will be of $1,130,434.78

Explanation:

we solve for the present value of a perpetual annuity as this cost goes forever unless we change into electronically afterwich; they disappear entirely.

$\frac{C}{r} =PV$

$\frac{5,200}{0.46} = 1,130,434.78$

7 0

3 years ago

Assume the service rate for a queue in a truck-loading operation is 2 trucks per hour. Using the infinite queuing notion for the

ivolga24 [154]

Answer:

C: 0.5 hours

Explanation:

Average service time = 1/Average service rate = 1/2 = 0.5 hours

3 0

3 years ago

What is the yield to maturity of a nineminusyear bond that pays a coupon rate of 20% per year, has a $1,000 par value, and i

snow_lady [41]

Answer:

12.28%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.

The NPER represents the time period.

Given that,

Present value = $1,407

Future value or Face value = $1,000

PMT = $1,000 × 20% = $200

NPER = 9 years

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after solving this, the answer would be 12.28%

8 0

3 years ago

Salmon Inc. has debt with both a face and a market value of $227,000. This debt has a coupon rate of 7 percent and pays interest

Dahasolnce [82]

Answer:

14.27%

Explanation:

Unlevered value = [Expected earnings before interest and taxes × (1- tax rate)]/Unlevered cost of capital

Unlevered value = [$87,200 x (1- 0.35)]/0.12 = $472,333.33

Levered value = Unlevered value + (Tax rate × Debt market value)

Levered value = $472,333.33 + (0.35 x $227,000) = $551,783.33

Value of equity = Levered value - Debt market value

Value of equity = $551,783.33 - $227,000 = $324,783.33

Cost of equity = Unlevered cost of capital + [(unlevered cost of capital - coupon rate) × (Debt market value/Value of equity) × (1 - Tax rate)]

Cost of equity = 0.12 + [(0.12 - 0.07) × ($227,000/$324,783.33) × (1 - 0.35)] = 0.1427, or 14.27%

Therefore, the firm's cost of equity is 14.27%

7 0

3 years ago

David saves money from his teaching job to buy a new boat when he retires in 20 years. The boat will cost $30,000. He has $12,00

LuckyWell [14K]

Answer:

True

Explanation:

The main advantage of a compound interest account is that the interest that you earn also earns interest, so the total amount of earned interest increases.

For example, a $10,000 account earning simple interest at a 4% rate will earn $4,000 in ten years. While the same amount in a compound interest account will earn $4,802.

7 0

3 years ago