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Llana [10]
2 years ago
11

Anderson Manufacturing​ Co., a small fabricator of​ plastics, needs to purchase an extrusion molding machine for ​$180 comma 000

. Kersey will borrow money from a bank at an interest rate of 14​% over five years. Anderson expects its product sales to be slow during the first​ year, but to increase subsequently at an annual rate of 7​%. Anderson therefore arranges with the bank to pay off the loan on a​ "balloon scale," which results in the lowest payment at the end of the first year and each subsequent payment being just 7​% over the previous one. Determine the five annual payments.
Business
1 answer:
vlabodo [156]2 years ago
6 0

Answer:

1st     46,398.83

2nd    49,646.74

3rd      53,122.02

4th      56,840.56

5th       60,819.40

Explanation:

given a growing annuity we have to solve for the installement

FV = \frac{1-(1+g)^{n}\times (1+r)^{-n} }{r - g}

FV = PV (1+r)^5 = 180,000 x 1.14^5 =  346,574.62  

grow rate 0.07

interest rate 0.14

n = time     5

346,574.62 = C  \times \frac{1-(1+0.07)^{5}\times (1+0.14)^{-5} }{0.14 - 0.07}

C = 46398.8284

Now, to determiante the subsequent payment we multiply by the grow rate of 1.07

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e. all of the above

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The general willingness of consumers to purchase a product at various prices is __________.
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3 years ago
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The shareholders need to earn 20%. The firm can borrow at 5%. The risk free rate is 2%. The tax rate is 40%. Find the weighted a
lbvjy [14]

Answer:

11.5%

Explanation:

The computation of the weighted average cost of capital is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.50 × 5%) × ( 1 - 40%) +  (0.50 × 20%)

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3 0
3 years ago
A machine is purchased on January 1, 2018, for $102,000. It is expected to have a useful life of eight years and a residual valu
allochka39001 [22]

Answer:

Depreciation expense 2019= $17,062.5

Explanation:

Giving the following information:

Purchase price= 102,000

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To calculate the depreciation expense under the double-declining balance, we need to use the following formula:

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