Answer:
the maximum loan size is $1,278,335.62
Explanation:
The computation of the maximum loan size is as follows:
= (NOI first year ÷ debt coverage rate) × 1 ÷ (rate of interest) × (1 - 1 ÷ (1 + rate of interest)^number of years)
= ($150,000 ÷ 1.5) × 1 ÷ (6%) × (1 - 1 ÷ (1 + 6%)^(25))
= $1,278,335.62
hence, the maximum loan size is $1,278,335.62
We simply applied the above formula
Answer: a
Explanation:
Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over another. While financial reports do not show opportunity cost, business owners can use it to make educated decisions when they have multiple options before them.
Because by definition they are unseen, opportunity costs can be easily overlooked if one is not careful. Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.
Opportunity cost analysis also plays a crucial role in determining a business's capital structure. While both debt and equity require expense to compensate lenders and shareholders for the risk of investment, each also carries an opportunity cost. Funds used to make payments on loans, for example, are not being invested in stocks or bonds, which offer the potential for investment income. The company must decide if the expansion made by the leveraging power of debt will generate greater profits than it could make through investments.
The appropriate response is an innovator. It is a man which is the first to attempt new thoughts, procedures, products and ventures. Albeit minimum various the individuals from this boldest gathering are urbane, have cash and advanced education, are pulled in to change and new encounters, and utilize different data hotspots for settling on a buying choice. Pioneers are trailed by early adopters, early greater part, late larger part, and loafers, in a specific order.
Answer:
Net present value
Explanation:
Below is the given values:
Net present value is the correct answer.
Initial cost of the project = $31800
Market value of the project = $29600
The difference between these two are = 31800 - 29600 = $2200
Net present value shows that the present value of cash inflows minus cash outflows. Moreover, the present value comes by discounting the cash flows at an applicable discount rate.
Answer:
$1.55
Explanation:
Interest rate parity = (1+Rh) / (1+Rf) = F1 / S0
Rh = rate on home currency here US is home 3% p.a = 3%/4 = 0.75%
Rf= rate on foreign currency here Germany 3.5% p.a = 3.5%/4 = 0.875
F1 = Forward rate
, S0= Spot market rate
So, (1+0.0075) / (1+0.00875) = F1 / 1.56
1.0075/1.00875 = F1 / 1.56
0.998761 = F1 / 1.56
F1 = 0.998761 * 1.56
F1 = 1.55806716
F1 = $1.55
Thus, the 90-day forward rate is $1.55
