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ale4655 [162]
3 years ago
11

Amortization.  Loan Consolidated Incorporated​ (LCI) is offering a special​ one-time package to reduce Custom​ Autos' outstandin

g bills to one​ easy-to-handle payment plan. LCI will pay off the current outstanding bills of ​$242 comma 000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rtae of 9 ​% over the next 5 years.   a.  What are the annual payments of the​ loan? b.  What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5 ​years? c.  When will the balance be half paid​ off?   d.  What is the total interest expense on the loan over the 5 ​years?
Business
1 answer:
vladimir2022 [97]3 years ago
7 0

Answer:

Please find the complete question in the attached file.

Explanation:

Use PMT for the interest amount computation

PMT(12\%, 55, 232000, 0 , 0) = \$27,894.77

At first, the bulk of an initial premium is paid at the rate of interest, and that only the remainder of the small part is used for  amortization. The very first three years schedule is shown below:

Loan\ \ \ \ \ \ \ \ \ \  Annual\ \ \ \ \ \ \ \ \ \   Interest\ \ \ \ \ \ \ \ \ \   Principal\\\\

1\ \ \ \ \ \ \ \ \$232,000.00\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,840.00\ \ \ \ \ \ \ \ \$54.77\\\\2\ \ \ \ \ \ \ \ \$231,945.23\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,833.43\ \ \ \ \ \ \ \ \$61.34\\\\3\ \ \ \ \ \ \ \ \$231,883.89 \ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,826.07\ \ \ \ \ \ \ \ \$68.70\\\\

By the 49th payment, upwards of half of the initial amount borrowed would be the total principal paid. Using the formula CUMPRINC in excel, the entire principal payment is calculated twice.

Total Interest Expense = 27,894.77 \times 55 - 232,000 = \$1,302,212.27

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Suppose an economy consists of three sectors: energy (e), manufacturing (m), and agriculture (a). sector e sells 70% of its outp
Luba_88 [7]

Answer:

(1) Pe =0.3Pm + 0.15 Pa

Pm = 0.7Pe + 0.2 Pm + 0.3 Pa

Pa = 0.3 Pe + 0.5Pm +0.55 Pa

(2) The free variable Pa = 100

Explanation:

Solution

We create a table of outputs using the given percentages economy distribution

Energy         Manufacturing       agriculture     Purchased by

0                       0.3                       0.15                 energy

0.7                    0.2                       0.3                  manufacturing

0.3                    0.5                       0.55                Agriculture

Let Pe Pm, Pa represent the prices for each sector

We then create an income equation using the expenses of the table above

Now,

Pe =0.3Pm + 0.15 Pa

Pm = 0.7Pe + 0.2 Pm + 0.3 Pa

Pa = 0.3 Pe + 0.5Pm +0.55 Pa

Note: Kindly find an attached copy of part of the solution to the given question and complete question to of this exercise below

3 0
3 years ago
Kahle Company has two support departments: Purchasing and Payroll. The Purchasing Department expense is $500,000 to process 50,0
allsm [11]

Answer: $15600

Explanation:

To calculate the amount of the Payroll Department's cost that is allocated to the Assembly Department goes thus:

First we need to calculate the allocation rate which will be:

= $300,000/25,000

= $12.

Then, the departmental cost will be:

= Payroll checks × Allocation rate

= 1,300 × $12

= $15,600.

Therefore, the amount of the Payroll Department's cost that is allocated to the Assembly Department is $15600.

3 0
2 years ago
Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people, if grocery store
Mamont248 [21]

Answer:

<em>d. regressive tax.</em>

Explanation:

Because as we can see on the given statements that lower income people come to buy grocery than the higher income people, so the 10-cent fee for disposable bags will come under regressive tax, as we know that regressive tax is a tax in which is taken or collected largely from the lower income people than the higher income people.

<em>So, the correct option will be OPTION (d).</em>

6 0
3 years ago
Operating cash flow is defined as:A. a firm's net profit over a specified period of time.B. the cash that a firm generates from
mina [271]

Answer:

B. the cash that a firm generates from its normal business activities using its existing assets

Explanation:

It represent the cash from the main activity. It is a good indicator wether the company needs external financing or it can sustain his grow with own funds.

It is stated in the cash flow statement. along with investing and financing activities.

3 0
3 years ago
Which of the following statements about the relationship between interest rates and bond prices is true? I) There is an inverse
BaLLatris [955]

Answer: A. I and IV only

Explanation:

The relationship between bond prices and interest is an inverse one. This is because bonds have fixed rates so when for instance interest rates increase, the fixed rate of bonds will become less attractive as people would want to make the higher interest. They will therefore demand less of bonds and the prices will drop. The reverse is true.

Also, long term bonds are more affected by interest rate changes then short term bonds. This is because, as they have a longer term till maturity, they will be even less attractive when interest rates rise.

7 0
3 years ago
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