Homework Answers
Answer - The company will receive the required fund in both the options but offer from Bank A is better Because in option A the company will earn $142031.13799 more than Bank B.
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2(a) Your company needs S5 million in 5 years for buying new equipment. The company has...
2(a) Your company needs $5 million in 5 years for buying new equipment. The company has...
2(a) Your company needs $5 million in 5 years for buying new equipment. The company has $3.5 million that can be invested with the hope that it will result in the required sum after 5 years. Two banks have made the following proposals: Bank A: 8% per year interest, compounded yearly. Bank B: 1.8% interest per quarter (i.e. quarterly compounded). Will the company receive the required funds? Which offer is better?
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year Option B: Interest is to be received on a yearly basis and the Principal is to be received at the end All loan repayment items are end-of-year payments Which...
A company want to buy new equipment in 2 years. The total cost will be $6,600....
A company want to buy new equipment in 2 years. The total cost will be $6,600. They want to put some funds into an interest drawing account that will compounded quarterly. If the company wants $6,600 in their account by the end of the year, please define the variables for the formula calculations This is exactly how the problem was worded
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year. Option B: Interest is to be received on a yearly basis and the Principal is to be receivedat the end. All loan repayment items are end-of-year payments. Which options...
Question #4 Your company needs $20,000. It signs a periodic payment note for 2 years agreeing...
Question #4 Your company needs $20,000. It signs a periodic payment note for 2 years agreeing to make monthly payments at 12 percent annual interest. What is the amount of each payment? What are the amounts shown on the pro forma income statement, statement of cash flows, and balance sheet for the first two months of this note? Question #5 Your company needs $20,000. It signs a lump-sum payment note for 2 years when the market rate of interest is...
Company Econ can borrow USD 10 million from Bank A for 2 years at a fixed...
Company Econ can borrow USD 10 million from Bank A for 2 years at a fixed and floating rate. Econ prefers to borrow at fixed rates on a semi-annual basis. Bank A offers the following pricing schedule for 6-month US dollars LIBOR, where the rates are mid-rates: Bank A's Pricing Schedule (2 years) for Company Econ Fixed interest rate per Floating interest rate per annum annum 9 % USD LIBOR + 34 basis points Bank A takes a bid-offer spread...
Cheyenne Inc. has $532,750 to invest. The company is trying to decide between two alternative uses...
Cheyenne Inc. has $532,750 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $70,693 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,672,000 at the end of the 12 years. Which alternative should Cheyenne select? Assume the interest rate is constant over the entire investment. e Textbook and Media Cheyenne Inc. has completed the purchase of new Dell computers....
Your company needs a new corporate jet for 5 years. You can either buy or lease...
Your company needs a new corporate jet for 5 years. You can either buy or lease it. If you lease it, you need to make a lease payment at the beginning of each year. All prices are in $ million. A B 1 Price of jet 16 2 Resale value after 5 years 8 3 Annual lease payment 1.6 4 Number of lease payments 5 5 Interest rate 12% Part 1 What is the net advantage to leasing, i.e., the...
a company has agreed to pay $2.1 million in 5 years to settle a lawsuit. how...
a company has agreed to pay $2.1 million in 5 years to settle a lawsuit. how much must in invest in an account paying 9% annual intetest compounded monthly to have that amount when is due? what is the interest rate per period ?
Please full calculation and explanation. FUTURE VALUE PROBLEMS he Be year of nevolent Company has agreed...
Please full calculation and explanation.
FUTURE VALUE PROBLEMS he Be year of nevolent Company has agreed to lend you funds to complete the last your degree. The Company will lend you $2,400 today, if you agree to y a lump sum of $4,000 4 years from now. What is the approximate annual rate of interest that Benevolent is charging you? You discover $40,000 under your pillow, which can be invested at a rate of 8% 2. per year, compounded semi-annually....
2(a) Your company needs $5 million in 5 years for buying new equipment. The company has $3.5 million that can be invested with the hope that it will result in the required sum after 5 years. Two banks have made the following proposals: Bank A: 8% per year interest, compounded yearly. Bank B: 1.8% interest per quarter (i.e. quarterly compounded). Will the company receive the required funds? Which offer is better?
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year Option B: Interest is to be received on a yearly basis and the Principal is to be received at the end All loan repayment items are end-of-year payments Which...
A company want to buy new equipment in 2 years. The total cost will be $6,600. They want to put some funds into an interest drawing account that will compounded quarterly. If the company wants $6,600 in their account by the end of the year, please define the variables for the formula calculations This is exactly how the problem was worded
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year. Option B: Interest is to be received on a yearly basis and the Principal is to be receivedat the end. All loan repayment items are end-of-year payments. Which options...
Question #4 Your company needs $20,000. It signs a periodic payment note for 2 years agreeing to make monthly payments at 12 percent annual interest. What is the amount of each payment? What are the amounts shown on the pro forma income statement, statement of cash flows, and balance sheet for the first two months of this note? Question #5 Your company needs $20,000. It signs a lump-sum payment note for 2 years when the market rate of interest is...
Company Econ can borrow USD 10 million from Bank A for 2 years at a fixed and floating rate. Econ prefers to borrow at fixed rates on a semi-annual basis. Bank A offers the following pricing schedule for 6-month US dollars LIBOR, where the rates are mid-rates: Bank A's Pricing Schedule (2 years) for Company Econ Fixed interest rate per Floating interest rate per annum annum 9 % USD LIBOR + 34 basis points Bank A takes a bid-offer spread...
Cheyenne Inc. has $532,750 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $70,693 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,672,000 at the end of the 12 years. Which alternative should Cheyenne select? Assume the interest rate is constant over the entire investment. e Textbook and Media Cheyenne Inc. has completed the purchase of new Dell computers....
Please full calculation and explanation.
FUTURE VALUE PROBLEMS he Be year of nevolent Company has agreed to lend you funds to complete the last your degree. The Company will lend you $2,400 today, if you agree to y a lump sum of $4,000 4 years from now. What is the approximate annual rate of interest that Benevolent is charging you? You discover $40,000 under your pillow, which can be invested at a rate of 8% 2. per year, compounded semi-annually....
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