1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
wel
3 years ago
13

You borrow $8000 to buy a car, at an annual interest rate of 6%. Assume interest is compounded continuously. You make monthly pa

yments (approximate as continuous payments).
How much should you pay each month to pay off the loan in 3 years?
Business
1 answer:
hram777 [196]3 years ago
8 0

Answer:

We should pay $243.3 each month to pay of the loan.

Explanation

The present value of the loan is 8,000, the number of compounding periods are (3*12) =36 because payment is going to be made monthly for 3 years, the future value of the loan is 0 as there will be no lump sum payment at the end of the loan and equal payments each month, the monthly interest rate is 6%/12= 0.5%. We input these 4 values to find the monthly payment.

PV= 8,000

FV=0

N=36

I=0.5

Compute PMT= 243.3

You might be interested in
Diggin Tools just issued new preferred stock, which sold for $85 in the stock markets. Holders of the stock will receive an annu
lys-0071 [83]

Answer:

c. 11.70 percent

Explanation:

The computation of the cost of preferred stock is shown below:

= Annual dividend ÷ Sale price of preferred stock × (1 - flotation cost)

= $9.35 ÷ $85 × (1 - 6%)

=  $9.35 ÷ $79.9

= 11.70%

We ignored the marginal tax rate i.e 30%. In the case of preferred stock, the flotation cost would be deducted. We consider all the things that are given in the question

3 0
3 years ago
Leona, whose marginal tax rate on ordinary income is 37 percent, owns 100 percent of the stock of Henley Corporation. This year,
riadik2000 [5.3K]

Answer: See explanation

Explanation:

First and foremost, it should be noted that there's a flat tax rate of 21% on the taxable income, therefore the after tax income will be:

= (1 - 21%) × $1 million

= 79% × $1 million

= $790,000

Therefore, the amount of the dividend payment is $790,000 which is given to Leona.

The after tax cash flow from the dividend receipt will be:

= $790,000 - (20% × $790,000)

= $790,000 - (0.2 × $790,000)

= $790,000 - $158,000

= $632,000

Therefore, the total tax by Henly and Leona will then be:

= $210,000 + $158,000

= $368,000.

This is 36.8% (368000/1 million) of the tax rate.

5 0
2 years ago
firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. It has 2,000 bonds outstanding, each
Yuki888 [10]

Answer:

A Firm

The firm's WACC is:

= 12.16%

Explanation:

a) Data and Calculations:

                                              Common               Bonds

                                                  Stock

Outstanding shares/bonds  2,000,000              2,000

Market price per unit                $2                     $1,200

Total market value             $4,000,000   $2,400,000

Total value of debt and equity = $6,400,000

Weight                                      62.5%                37.5% ($2,400/$6,400*100)

Cost of bonds (coupon rate) = 10%

Tax rate = 34%

Firm's beta = 1.5

Risk-free rate = 5%

Market risk premium = 7%

After-tax cost of bonds = 6.6% (1 - 0.34) * 10%

Cost of common stock =

Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 5% + 1.5 x (7%)

= 5% + 10.5%

= 15.5%

WACC = 15.5% * 62.5% + 6.6% * 37.5%

= 0.096875 + 0.02475

= 0.1216

= 12.16%

7 0
2 years ago
In what situations is top-down planning likely to be superior to bottom-up emergent strategy development
Marianna [84]

Answer is given below :

Explanation:

  • Both strategies aim to convey and process knowledge between and within the organization. The top-down approach for sub-categories to gain insights at the senior management level breaks down a system.
  • This is a great tool to help managers identify areas of improvement using quota and monthly matrix goals. There are flaws in this strategy, employees are not involved in the process and managers do not understand the full impact of the changes made.
  • Morality can be affected because this strategy is motivated by fear and encouragement. The bottom line is that in some cases it is more complex, although employees feel motivated to provide more authority and quality work. The information is processed to a minimum and communicated to management.
  • This may help in some areas because administrators may not fully understand the process. I should use the military as an example for a top down strategy.
  • It works on the battlefield when there is no time to discuss or motivate employees. Top down is used when there is a slight change in environmental factors.
5 0
3 years ago
Assume that the united states current account balance is zero. If the united states dollar appreciates against the japanese yen,
Diano4ka-milaya [45]

If the United states dollar appreciates against the Japanese yen, then demand for united states exports will increase.

<h3>What is Export?</h3>

These are the goods and services produced in a country and sold into another country.

When the currency of United states dollar appreciates against the Japanese yen, there will be lesser cost in the production of such goods which will lead to increase in export demands.

Read more about Export here brainly.com/question/24473707

#SPJ1

7 0
2 years ago
Other questions:
  • Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all future dividends will be incr
    8·1 answer
  • 32) As the CEO of Blue Corp., Terrell makes it a point to meet new hires at all levels of his organization. He explains the goal
    9·1 answer
  • For much of the first half of the twentieth​ century, managers viewed work specialization as​ ________.
    8·1 answer
  • An economic system:
    11·1 answer
  • "Given current demographic trends, which of the following is NOT a strategy companies would use to gain a competitive advantage
    10·1 answer
  • A customer opens a new margin account with the following position:
    14·1 answer
  • Which of the following statements accurately explains why profits for firms in a perfectly competitive industry tend to vanish i
    11·1 answer
  • Sheridan Company declared a $229000 cash dividend. It currently has 12300 shares of 4%, $100 par value cumulative preferred stoc
    9·1 answer
  • Revision of Depreciation
    9·1 answer
  • The experience of the great recession showed that when the economy is in a recession, from a keynesian perspective, the governme
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!