Answer:
Statement # 1: False
Statement # 2: True
Statement # 3: False
Statement # 4: True
Explanation:
Lets look at each statement provided in the question and determine which of them is true or false.
Statement # 1 is false. First things first, the interest on this loan amount is higher which is at 4.15%. This is compared to the interest of 4% applicable on loan option 1. Secondly, there is a four year interest only option. This means that for 4 years there will be no repayments of the principal amount which means that the interest of 4.15% will continue to apply on the entire loan amount for these 4 years. In loan 1 however, principal repayments will reduce the principal amount after the 1st year which would further reduce the interest payment in the second year.
Statement # 2 is true. Loan 2 has an interest only period for the first 4 years. During this year you will only pay the 4.15% interest whereas in loan option 1, you will pay 4% interest AND the principal amount. The effect would offset once principal payments start in loan 2 but it would still mean that payments would be minimized in the first few years.
Statement # 3 is false. One of the advantages of having a loan with an interest free clause is that you can pay it off faster than a conventional loan. Since both the loans are fully amortizing, the principal payments would be different but would both result in the principal being repaid in the full 30 year tenor. Any extra payment that you wish to make would be counted towards principal payment in each loan option. However, for loan 1, the total monthly payments you make would remain the same. For loan 2, the extra payments that you make will continue to lower the monthly payments in way of interest which would allow you to save up more to pay more off in principal. The interest only period will also allow you to arrange extra funds during the IO period and repay the principal further. With loan 1, you will continue to make the same monthly payment until the end.
Statement # 4 is true. A fixed payment is being made each year by way of interest and principal repayments and will remain the same till the loan is fully amortized at maturity. In loan 2 on the other hand, a larger balloon payment will start 4 years later since only interest is paid in the first 4 years. So basically you may lower in the first 4 years and more in the remaining years.
The value of current stock price is equal to $57.93
<u>Explanation:</u>
Given dividend = $20 per year
The calculation of current stock price is as follows:
The Stock price at the beginning of 20th year is equal to = $20 divided by 8 percent = 250
Current stock price ( present value ) =
After calculating, we get, 57.92801
Therefore, the value of current stock price is equal to $57.93 (rounded off to 2 decimal places).
Explanation:
when one fails to harness this instinct, they end up trying to push others down in order to push themselves up
Answer:
b. Lew is a material participant in Activities A, B, C and D only.
Explanation:
The correct answer is b. All the activities has material participation except for activity E. The activity is considered significant of the participation by an individual is more than 100 hours. here Lew has 5 activities A, B, C, D and E. All the activities comprise Lew's participation for more than 100 hours but only activity E has participation less than 100 hours. The total of activities A, B, C and D is 530 (120 + 150 + 140 + 110).
The firm must ensure upgrading the departments core competencies through making sure that employees have the innate ability or skills demanded.
Firms that adopt the Cost leadership strategy does so to earn higher returns and competitive advantages through of offering of products at lowest prices in the market.
The core competencies in manufacturing and logistics includes pro-activeness, ability to handle documents properly, strategic thinking, forward thinking, logical decision-making, networking abilities etc
However, the firm must ensure upgrading the departments core competencies through making sure that employees have the innate ability or skills demanded.
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