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konstantin123 [22]
3 years ago
13

You are interested in purchasing a new automobile that costs $35,000. The dealership offers you a special financing rate of 6% A

PR (0.5%) per month for 48 months. Assuming that you do not make a down payment on the auto and you take the dealer's financing deal, then your monthly car payments would be closest to:
Business
1 answer:
Nadusha1986 [10]3 years ago
5 0

Answer:

Monthly car payments would be closest to $822

Explanation:

Use the following formula to calculate the monthly car payment

PV of Annuity = Annuity Payment x ( 1 - ( 1 + interest rate )^-Numbers of periods ) / Interest rates

Where

Interest rate =  0.5% per month

Numbers of periods =  48 months

PV of Annuity =  $35,000

Annuity Payment = Monthly car payment = ?

Placing values in the formula

$35,000 = Monthly Payment x ( 1 - ( 1 + 0.5% )^-48 ) / 0.5%

$35,000 = Monthly Payment x 42.58031778

Monthly Payment = $35,000 / 42.58031778

Monthly Payment = $821.9760167

Monthly Payment = $821.98 ( Rounded to two decimal number )

Monthly Payment = $822 ( Rounde to dollar value )

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Answer:

expected bankruptcy costs =  $190000

Explanation:

given data

face value = $4 million

equity = $18.6 million

stock outstanding = 510000 shares

sell price = $31 per share

corporate tax rate = 35 percent

to find out

decrease in the value of the company due to expected bankruptcy costs

solution

we get here value of levered firmed by M & M proportion

value of levered firm = value of equity + value of debit

value of levered firm = $18.6 million + 35% ( $4 million)

value of levered firm = $20 million

and

now we get total market value of firm that is

total market value of firm = market value of equity + market value of debit

total market value of firm = $31 ( 510000 ) +  $4 million

total market value of firm = $19810000

so expected bankruptcy costs are here as

expected bankruptcy costs =  $20 million - $19810000

expected bankruptcy costs =  $190000

7 0
3 years ago
An increase in the demand for loanable funds will occur if there is A. an increase in the real interest rate. B. an increase in
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Answer:

C, a decrease in the real interest rate

Explanation:

When factors such as changes in expectation, technology, demands for goods and services, etc cause in shift in the demand curve for capital, interest rates act as the determinant of the capital demand.

If the interest rates of loans are high, capital demand will be reduced but in the event that interest rates are low, capital demand is high or increases.

Cheers

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B. To see where most of your money is going

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Answer:

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