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Question 3 1 pts A company borrows $7,000 to purchase a new piece of equipment. The...
Please explain for each step A company borrows $17,000 to purchase a new piece of equipment....
Please explain for each step
A company borrows $17,000 to purchase a new piece of equipment. The loan will be repaid in one lump sum at the end of 5 years. The bank offers to loan the money at 0.5% per month, but the company prefers to repay the loan at 6% per year. If the company is successful at getting the bank to agree to its preferred terms, how much will the company save in interest on the loan?...
1. A construction company borrows $100,000 to purchase equipment with a promise to repay the loan...
1. A construction company borrows $100,000 to purchase equipment with a promise to repay the loan with equal monthly payments over a 6-year period. a. Draw the cash flow diagram b. At an interest rate of 8% compounded monthly, what are the annual payments to pay off the loan in full?
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment...
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: $20,000 20% of or Initial investment .............. Annual cost savings ............. Salvage value in 6 years ........ iginal cost of the equipment Repair in 4 years .... Cost of capital ................. Life of project ....... $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
Question 4 0.13 pts The company you work for wants to purchase a new piece of...
Question 4 0.13 pts The company you work for wants to purchase a new piece of equipment that is estimated to cost $100,000 3 years from now. How much must they invest today in order to have the $100,000 in 3 years assuming they earn 4% interest?
3. A company is considering the purchase of a new piece of testing equipment which is...
3. A company is considering the purchase of a new piece of testing equipment which is expected to produce $8,000 additional before-tax profit during the first year of operation; this amount will probably decrease by $500 per year for each additional year of ownership. The equipment costs $20,000 and will have estimated salvage value of $3,000 after 8 years of use. For a before-tax interest rate of 25%, determine the net present worth of this investment.
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment...
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ ...... Annual cost savings ............. Salvage value in 6 years. Repair in 4 years ..... Cost of capital .. Life of project ................. ? $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money at 2.5% APR compounded monthly. You initiate the mortgages to your customers at 6% APR compounded monthly. You then sell the mortgages to banks which will administer the loans. You charge a 10% commission on the present value of each mortgage when it is initiated. If you have just initiated a 30-year mortgage loan for $250,000... a. Show the cash flow diagram from the...
(1). 2.3 To purchase a new truck it is necessary to borrow $30,000. The bank car...
(1). 2.3 To purchase a new truck it is necessary to borrow $30,000. The bank car dealer offers a 6-yr loan at an interest rate of 3.25% compounded annually. If you make only one payment at the end of the loan period, repaying the principal and interest, what is the total amount that must be paid back? a. What is the number of time periods (n) you should use in solving this problem? b. What rate of interest (i), per...
Aggie Company purchased a piece of equipment with an invoice price of $80,000 on March 1,...
Aggie Company purchased a piece of equipment with an invoice price of $80,000 on March 1, 2019. Other information concerning the purchase include the following: (1) Shipping costs totaling $1,000 (2) Sales tax totaling $6,400 (3) Terms of the purchased were 3/20; net 60. The invoice was paid on March 15, 2019. (4) A state agency required that an anti-pollution device be installed on the equipment at a cost of $4,000. (5) During installation, the equipment was damaged and repair...
Please explain for each step
A company borrows $17,000 to purchase a new piece of equipment. The loan will be repaid in one lump sum at the end of 5 years. The bank offers to loan the money at 0.5% per month, but the company prefers to repay the loan at 6% per year. If the company is successful at getting the bank to agree to its preferred terms, how much will the company save in interest on the loan?...
1. A construction company borrows $100,000 to purchase equipment with a promise to repay the loan with equal monthly payments over a 6-year period. a. Draw the cash flow diagram b. At an interest rate of 8% compounded monthly, what are the annual payments to pay off the loan in full?
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: $20,000 20% of or Initial investment .............. Annual cost savings ............. Salvage value in 6 years ........ iginal cost of the equipment Repair in 4 years .... Cost of capital ................. Life of project ....... $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
Question 4 0.13 pts The company you work for wants to purchase a new piece of equipment that is estimated to cost $100,000 3 years from now. How much must they invest today in order to have the $100,000 in 3 years assuming they earn 4% interest?
Question 3 4.5 pts XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ ...... Annual cost savings ............. Salvage value in 6 years. Repair in 4 years ..... Cost of capital .. Life of project ................. ? $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money at 2.5% APR compounded monthly. You initiate the mortgages to your customers at 6% APR compounded monthly. You then sell the mortgages to banks which will administer the loans. You charge a 10% commission on the present value of each mortgage when it is initiated. If you have just initiated a 30-year mortgage loan for $250,000... a. Show the cash flow diagram from the...
(1). 2.3 To purchase a new truck it is necessary to borrow $30,000. The bank car dealer offers a 6-yr loan at an interest rate of 3.25% compounded annually. If you make only one payment at the end of the loan period, repaying the principal and interest, what is the total amount that must be paid back? a. What is the number of time periods (n) you should use in solving this problem? b. What rate of interest (i), per...
Aggie Company purchased a piece of equipment with an invoice price of $80,000 on March 1, 2019. Other information concerning the purchase include the following: (1) Shipping costs totaling $1,000 (2) Sales tax totaling $6,400 (3) Terms of the purchased were 3/20; net 60. The invoice was paid on March 15, 2019. (4) A state agency required that an anti-pollution device be installed on the equipment at a cost of $4,000. (5) During installation, the equipment was damaged and repair...
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