1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
scZoUnD [109]
3 years ago
5

Sanders Co. is planning to finance an expansion of its operations by borrowing $49,200. City Bank has agreed to loan Sanders the

funds. Sanders has two repayment options: (1) to issue a note with the principal due in 10 years and with interest payable annually or (2) to issue a note to repay $4,920 of the principal each year along with the annual interest based on the unpaid principal balance. Assume the interest rate is 9.5 percent for each option.
Required
a. What amount of interest will Sanders pay in year 1 under option 1 and under option 2?
Amount of Interest
Under option 1
Under option 2
b. Wihat anount of insyinyder option 1 and under option 27 (Round your final answers to the nearest dollar amount)
Amount of Interest
Under option 1
Under option 2
c. Which option is more advantageous to Sanders?
Option 1
Option 2
Business
1 answer:
saw5 [17]3 years ago
4 0

Answer:

Following are the responses to the given question:

Explanation:

For point a:

Interest amounts are paid by sanders in year 1 Under option 1 and 2

In option 1  

Due principal  \$49,200

Rate of Interest 9.50\%

Expanse Interest \$4,674

In Option 2  

Due principal  \$49,200

Rate of Interest 9.50\%

Expanse Interest \$4,674

For point b:

Interest amounts are paid by sanders in year 1 Under option 1 and 2

In option 1  

Due principal  \$49,200

Rate of Interest 9.50\%

Expanse Interest \$4,674  

In Option 2  

Due principal  \$44,280

Rate of Interest 9.50\%

Expanse Interest \$4,207

For point c:

Option 2 is better for Sanders since it reduces investment expenditure

You might be interested in
Complete an information-level design for Holt Distributors. General description. Holt Distributors buys products from its vendor
Stolb23 [73]

Answer:

Here are some changes to the textbook requirements that will simplify your work somewhat.

· The transaction requirements give you information on required tables. (page 339-340)

· Assume that ALL orders ship entirely, in other words there are no partial shipments. Either they ship the entire order or they wait until they have all the required units and then ship.

· Do not include the Customer PO information

Explanation:

4 0
2 years ago
Question- outline and discuss the steps of the marketing management process that a marketing manager Is Responsible for
lord [1]

Answer: 1) Raising brand awareness 2) Supervise sales team 3) Carry out presentation

Explanation:

The marketing management has a lot to do to ensure a product is well sold in the market.

1) Raising brand awareness; the product management must come up with innovative wats of promoting brand awareness, either through social media or street marketing, these lies in their hands to do. They are to come up with marketing campaigns

2) Supervise team: the product management would work with a team of marketers and while doing so, would supervise each of them in monitoring how they are going about getting new clients and retaining old clients

3) Presentations; where the nee arises, the marketing management would go out for presentations to companies and group of organization to teach about her products. This can also be done by her team members but they are some occasion the management plays the role

4 0
2 years ago
When the Federal Reserve seeks to contract the money supply, it may Group of answer choices sell securities and raise the target
shutvik [7]

Answer:

Option "Sell securities but instead start raising the federal objective  Rate of funds" is the right response.

Explanation:

  • Across the whole of collective memory, the free-market community had already progressed thru all the boom-and-bust phases.
  • The Federal Reserve must have been designed to assist start reducing this year's injuries caused mostly during depressions but instead provided several other effective features to impact the money supply. Continue reading to learn how well the Fed is managing this same money supply.

Some other decisions are not comparable to the type of situation in question. So that is the correct choice.

8 0
2 years ago
It seems as if consolidated net income is always less than the sum of the parent’s and subsidiary's separately calculated net in
BARSIC [14]

Answer:

<h2>Consolidated net income is the sum of net income of the parent company excluding any income from subsidiaries recognized in its individual financial statements plus net income of its subsidiaries determined after excluding unrealized gain in inventories, income from intra-group transactions, etc.</h2>
4 0
1 year ago
a. How can increases in government spending crowd out investment spending? An increase in government spending increases the use
Delvig [45]

Answer:

         a.  increases the real interest rate, which reduces private investment spending.

        b.  is not a major concern, because the Fed will likely lower the real interest rate when actual output is far below potential.

Explanation:

Increase in government spending means that the government would probably have to borrow money from the credit market. Because the government is so large, it will borrow in large amounts which would force rates to rise. At these higher rates, the private sector might find it too expensive to borrow money and so would be crowed out such that they reduce their investment spending.

When the economy is facing an output that is lower than potential, the Fed will engage in monetary policy aimed at reducing interest rates to improve investment spending. This therefore negates the effect of crowing out which means that it would no longer be a major concern.

4 0
2 years ago
Other questions:
  • What is a corporation? a partnership that raises money through loans from the goverment a company whose owner is personally resp
    15·2 answers
  • The EFT Act protects consumers by
    8·2 answers
  • Gessner LLC patented a process it developed in the current year. The patent is expected to create benefits for Gessner over a 10
    10·1 answer
  • _______________ ensures that all relevant financial information is reported. (select an option)
    12·1 answer
  • Expected direct materials purchases in Metlock Company are $204000 in the first quarter and $264000 in the second quarter. 35 pe
    14·1 answer
  • If Julius has a 30% tax rate and a 10% after-tax rate of return, a $40,000 tax deduction in two years will save how much tax in
    6·1 answer
  • Andy works at AZ Corporation. He has been working very hard and feels he deserves a pay hike. He wants to seek a meeting with An
    10·1 answer
  • A firm has issued $5 par value preferred stock that pays a $0.80 annual dividend. The stock currently sells for $9.50. In calcul
    6·1 answer
  • Margaret puts money into her savings account each month. in this example money is functioning as a
    7·1 answer
  • In the current labor market, suppose that the wage rate for accountants is significantly higher than the wage rate for economist
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!