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ElenaW [278]
3 years ago
12

Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a five-year, $6,000,000 bank loan t

o finance service equipment. The loan has an interest rate of 10 percent and would be amortized over five years, with five end-of-year payments. Sutton can also lease the equipment for five end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment?
Business
1 answer:
MArishka [77]3 years ago
4 0

Answer:

Ans. The loan payment is $1,582,784.88, therefore is smaller than the lease by $207,215.12

Explanation:

Hi, first we have to find out the amount to pay for the loan every year in order to verify if the loan is cheaper or more expensive than the lease, we have to use the following formula and slove it for "A".

PresentValue=\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }

Now, we solve for A

6,000,000=\frac{A((1+0.10)^{5}-1) }{0.10(1+0.10)^{5} }

6,000,000=\frac{0,61051}{0,161051} A

6,000,000=A(3,790786769)

A=1,582,785.88

Now we can see that the lease is more expensive than the loan, this is how to find out for how much.

1,790,000- 1.582.784,88 = 207.215,12

Best of luck.

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The closing cost of the house mortgage is lower than the envisioned by 0.5%.

<h3>What is the closing cost?</h3>

Closing expenses are the prices over and above the property's rate that consumers and dealers generally incur to finish an actual property transaction.

Those expenses may also encompass mortgage origination fees, cut price points, appraisal fees, name searches, name insurance, surveys, taxes, deed recording fees, and credit score file charges.

The lender is required by regulation to expose those expenses in the form of a mortgage estimate within 3 days of a domestic mortgage application.

Gifts of equity (actual property income given to a relative or close pal at a below-marketplace rate) can also incur a few closing cost.

So, from the above announcement, it's clear that alternative D, decreasing by 0.5%, is an appropriate answer.

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4 0
2 years ago
Bruce, a first-line supervisor at Lou’s Market, regularly uses abusive and derogatory words when dealing with his subordinates.
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Answer:

The correct answer is Interpersonal.

Explanation:

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4 0
3 years ago
You buy a stock for which you expect to receive an annual dividend of $2.10 for the fifteen years that you plan on holding it. a
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<span>You are given an annual dividend of $2.10 for the fifteen years that you plan on holding it. Also, after 15 years, you are given to sell the stock for $32.25. You are asked to find the present value of a share for this company if you want a 10% return. You have to mind that the future stock for 15 years is $32.25. You are not only going to mind the present value of the annuity at $2.10 but also the $32.25.

With the interest of r = 10% and number of years of n = 15, we get
PVIFA = 7.6061.

For annuity we have,
$2.10 * 7.60608 = $15.973

For $32.35 with r = 10% and n = 15
PVIF = 0.239392

Thus for the present value of selling price,
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6 0
3 years ago
at what point described below will producer surplus most likely drop to zero for a firm? a.) when the firm is taking a significa
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(B) When revenue equals opportunity and variable cost, then the producer surplus most likely drops to zero for a firm.

<h3>What is revenue?</h3>
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Therefore, (B) when revenue equals opportunity and variable cost, then the producer surplus most likely drops to zero for a firm.

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3 0
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Answer:

$233,000

Explanation:

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where,

Beginning inventory = $32,000

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= $240,000 - $6,000 - $10,000 + $17,000

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And, the ending inventory is $40,000

So, the cost of goods sold is

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