The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NYW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called. What will the after-tax annual interest savings for NYW be if the refunding takes place?
You deposit $16,000 per year for 12 years (deposits at the end of each year) in an account that pays an annual interest rate of 14%. What will your account be worth at the end of 12 years? 11. You plan to borrow $389,000 now and repay it in 25 equal annual installments (payments will be made at the end of each year). If the annual interest rate is 14%, how much will your annual payments
What is the required journal entry as a result of this litigation? 10. Question: : (TCO D) Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a discount this indicates
Joe makes $15 per hour and works 40 hours per week. 30-year mortgage interest rate of 6.25% and a monthly payment of $439.00 15-year mortgage interest rate of 5.25% and a monthly payment of $575.00 Down payment: 5% minimum Taxes last year were $375. Insurance is $250 per year. What you are looking for: 1. Can Joe afford the monthly payments with taxes and insurance for either a 30 or 15 year mortgage?
• begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales. • shows how long the firm keeps its inventory before selling it. Click here to download STR 581 Week 4 Capstone 2 19. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows?
On March 31, 2011, Mary borrowed $200,000 to refinance the original mortgage on her principal residence. Mary paid 3 points to reduce her interest rate from 6 percent to 5 percent. The loan is for a 30year period. How much can Mary deduct in 2011 for her points paid?
FIN- 515: Managerial Finance Homework 2: Chapter 3 Problems: (3-1) Days Sales Outstanding: Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. DSO = Receivables / Ave. sales per day Receivables= DSO * Ave. sales per day = 20 * 20,000 Receivables= $400,000 (3-2) Debt Ratio: Vigo Vacations has an equity multiplier of 2.5.
1.1a Write down the corrected monthly expenditure figures that the adviser draws up, using the information above. Table 1 Wilfred’s monthly expenditure (£) Mortgage (APR 4.5%, fixed monthly contribution, 20 years remaining) 625.00 Council tax 71.25 Electricity and gas 110.00 Motorbike loan (APR 5%, fixed monthly contribution, seven years remaining) 125.00 Gym 45.00 Motoring costs 70.00 Other travel 320.00 Food and drink 215.00 Household goods 45.00 Personal goods and services 115.00 Entertainment 175.00 Holiday 100.00 Insurance 70.00 Total £2086.25 1.1b What is the effect of these corrections on Wilfred’s monthly budget surplus or deficit? He will have a monthly budget surplus of £13.75. 1.2a Wilfred proposes to his pregnant girlfriend Freya, who decides to move in with him (he still intends to buy the satellite phone, paying £25 pcm for the next two years). Describe three likely consequences of these actions for the future household budget.
A company leases a machine on January 1, Year One for five years which call for annual payments of $4,000 for the first year and then $10,000 per year after that. The present value of these payments based on a reasonable interest rate of 10 percent is assumed to be $38,000. This lease
FV = PV x (1+r)5; $100,000 = $65,000 x (1=r)5; 1.53846 = (1+r)5; (1.53846) 1/5 = 1+r; 1.08998 = 1+r; annual rate = 8.998$ 13. PV of Annjuity = Payment x [1-(1+r)-5]/r; $33,520 = $10,000 x [1-(1+r)-5]/r Period 9nper0 = 5; Payment = $10,000; Present Value (PV) = $33,250; Future Value (FV) = $0; Rate of Return =