The money factor that will be used to calculate Bob's payment is 0.00333 if the annual percentage rate is 8% option (c) is correct.

<h3>What is money factor?</h3>

It is defined as the ratio of the annual percentage rate to 2400. Usually, it can be used to calculating the financing costs of a lease with monthly installments.

Bob is thinking about leasing a car, the lease comes with an interest rate of 8%.

The annual percentage rate(APR) = 8%

We know the formula for finding the money factor is given by:

$\rm Money \ factor = \frac{APR}{2400}$

$\rm Money \ factor = \frac{8}{2400}$

Money factor = 0.00333

Thus, the money factor that will be used to calculate Bob's payment is 0.00333 if the annual percentage rate is 8% option (c) is correct.

Learn more about the money factor here:

brainly.com/question/9583229

8 0

1 year ago

You are considering a stock investment in one of two firms (Lotsof Debt, Inc. and LotsofEquity, Inc.), both of which operate in

saveliy_v [14]

Answer:

LotsofDebt, Inc Debt Ratio is 93.75%

LotsofEquity, Inc Debt Ratio is 6.25%

equity multiplier LotsofDebt, Inc is 16

equity multiplier LotsofEquity, Inc is 1.0666666667

debt-to-equity LotsofDebt, Inc is $15 million

debt-to-equity LotsofEquity, Inc. is $0.0666666667 million

Step-by-step explanation:

In order to calculate the debt ratio of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:

Debt Ratio = Debt/Assets

According to the given data we have the following:

LotsofDebt, Inc Debt=$30 million

LotsofDebt, Inc Asset=Debt + Equity = $30 million + $2 million = $32 million

Therefore, LotsofDebt, Inc Debt Ratio =$30 million/$ 32 million

LotsofDebt, Inc Debt Ratio= 93.75%

LotsofEquity, Inc. Debt=$2 million

LotsofEquity, Inc Asset= Debt + Equity = $2 million + $30 million

LotsofEquity, Inc Debt Ratio = $2 million/$32 million

LotsofEquity, Inc Debt Ratio = 6.25%

In order to calculate the equity multiplier of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:

equity multiplier =Assets/Equity

equity multiplier LotsofDebt, Inc.=$32 million/$2 million

equity multiplier LotsofDebt, Inc= 16

equity multiplier LotsofEquity, Inc=$32 million/$30 million

equity multiplier LotsofEquity, Inc = 1.0666666667

In order to calculate the debt-to-equity of LotsofDebt, Inc and LotsofEquity, Inc. we would have to make the following calculations:

debt-to-equity LotsofDebt, Inc=Debt/Equity

debt-to-equity LotsofDebt, Inc=$30 million/$2 million

debt-to-equity LotsofDebt, Inc= $15 million

debt-to-equity LotsofEquity, Inc.= $2 million/$30 million = 0.0666666667

debt-to-equity LotsofEquity, Inc.= $0.0666666667 million

7 0

3 years ago