Homework Answers
![Answer to Q#22 (First question in the list): Option-(c): $23,408 Reason: 0.3333% [4.0% / 12; APR is converted into monthly rate] Monthly Interest rate, RATE # of months of loan, NPER Loan amount, PV Start period End periood Monthly payment type, TYPE 72 [6 years x 12 months > Total tenure of the loan] $24,000 [Given] 3 [As installments for 2 months were paid already] 72 [To calculate till final installment of the loan arrangement] 0 0 if installments paid at the end of each month; 1 if installments paid at the beginning of each month Monthly payments required 375.48 [Ref: NOTE] Principal outstanding after making 2nd payment $23,408.05 [Ref: NOTE]](http://img.homeworklib.com/questions/cec315b0-71be-11ea-bd6a-5b397b111130.png?x-oss-process=image/resize,w_560)
![NOTE Monthly payments required is calculated using EXCEL FUNCTION PMT(rate,nper,pv,fv,type) where rate:0.3333%; nper=72; pv-24000; fv:0; type:0; Here, value for pv is negative because it denotes cash inflow; fv is positive as it denotes cash outflow; type-0 as monthly payments occur at the end of each month only Principal outstanding after making 2nd payment is calculated using EXCEL FUNCTION CUMPRINC(rate,nper,pv,start period, end period,type) where rate:0.3333%; nper=72; pv-24000; start period-3; end period-72; type-o type+ 0 because installments paid at the end of each month only; start-period-3 because we are calculating principal outstanding after 2nd installment. End_period 72 remaining debt till last installment shall be calculated 4%/12 [4.0% / 12; APR is converted into monthly rate Monthly Interest rate, RATE 2 | # of months of loan, NPER 3 Loan amount, PV 4 Start period 5 End period 6 Monthly payment type, TYPE 6 12 [6 years x 12 months >Total tenure of the loan] $24,000 [Given] [As installments for 2 months were paid already) 72 [To calculate till final installment of the loan arrangement] 0 = 0 if installments paid at the end of each month:1 if installments paid at the beginning of each month Monthly payments required PMT(B1,B2, B3,0,B6) Ref: NOTE 10 Principal outstanding after making 2nd paymentE-CUMPRINC(81,82.83,84,B5,B6) (Ref: NOTE](http://img.homeworklib.com/questions/cf3e62e0-71be-11ea-b346-4be13c77725f.png?x-oss-process=image/resize,w_560)
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Today is January 1t, 2019 (T-0). You take out a 6 year fully amortizing auto loan...
Today is January 1st, 2019 (T=0). You take out a 6 year fully amortizing auto loan...
Today is January 1st, 2019 (T=0). You take out a 6 year fully amortizing auto loan of $24,000. Payments are made at the end of each calendar month. The loan has a fixed annual rate of 4.0% (or 4.0%/12 per month). 22. Calculate the monthly payment on the auto loan. If you were to pay off the balance of the loan at the end of the 2nd month (immediately after making the second monthly payment), the amount of money you...
Today is January 1st, 2019 (T=0). You take out a 6 year fully amortizing auto loan...
Today is January 1st, 2019 (T=0). You take out a 6 year fully amortizing auto loan of $24,000. Payments are made at the end of each calendar month. The loan has a fixed annual rate of 4.0% (or 4.0%/12 per month). Assume you decide to make monthly payments of $503.50 instead. Approximately how many months sooner would you pay off the auto loan? 1.) 18 2.) 20 3.) 22 4.) 24 5.) 48
No need for Explanation and you can skip Q 21 21.A company estimates an NPV of...
No need for Explanation
and you can skip Q 21
21.A company estimates an NPV of a project under three different set of assumptions (Bear, Base, Bull) to evaluate forecasting risk; management agrees to undertake the project if the weighted average NPV for the three different scenarios (Bear, Base, Bull) is positive. Based on the scenario analysis performed, the company will pursue the proiect. Evaluate the underlined words in italics. True or False? Scenerio Bear Base Bull NPV Probability 30.00%...
you can skip Q 21 5. Assume you are a sell-side analyst and you cover the...
you can skip Q 21
5. Assume you are a sell-side analyst and you cover the widget
industry. In 2018, Big Widget Company decided to double
manufacturing capacity by issuing debt in order to capitalize on
the growing demand for widgets. Assume that the company was able to
realize scale economies through increased buying power. Any benefit
from these scale economies was offset by borrowing money at a much
higher interest rate than existing long term debt. Using 5-Stage
DuPont...
25. A creditor is willing to offer you $5,000 today in the form of a pure...
25. A creditor is willing to offer you $5,000 today in the form of a pure discount loan, an interest only loan, or an amortizing loan. Each loan is for an 8 year period where you will pay interest one time per year (if applicable). While you are willing to pay the creditor annual interest, you do not want to return any of the $5,000 in principle for 8 years. You would also prefer to pay as little interest over...
Today is January 1, 2020 (T=0). You take out a 30 year fully amortizing mortgage of...
Today is January 1, 2020 (T=0). You take out a 30 year fully amortizing mortgage of $400,000. Payments are made at the end of each calendar month. The loan has a fixed annual rate of 4.0% (or 4.0%/12 per month). How payments will you have to make until you have at least $300,000 of equity in your home? a. 32 b. 33 c. 109 d. 110 e. 111
24. During lecture we illustrated how the profitability of different types of companies can change as...
24. During lecture we illustrated how the profitability of different types of companies can change as the economy moves through a business cycle of 7-10 years. A company like Molson-Coors Brewing Company (which trades under the ticker TAP) would best be described as a When economic conditions deteriorate (e.g. during the housing crisis), TAP's operating margin would most likely a. non-cyclical company b. cyclical company C. non-cyclical company d. cyclical company e. non-cyclical company increase significantly decrease significantly decrease significantly...
You need to borrow $200,000. E-Click loans will make a 30 year, fully amortizing mortgage loan...
You need to borrow $200,000. E-Click loans will make a 30 year, fully amortizing mortgage loan with monthly payments, with no points at an interest rate of 8%. (a) Construct a loan amortization schedule for the first 4 months of the loan. (b) What is the principal amount of your loan outstanding after 7 years (84 months) of making payments? Show that you can determine this by finding the FV of the loan after 7 years. Highlight your final answer
1.Your auto insurance premium of $2200 is due today. You insurance company is giving you the...
1.Your auto insurance premium of $2200 is due today. You insurance company is giving you the "easy financing" option of making 12 monthly payments, with the 1st payment starting today. The interest rate on this financing option is 17.00% with monthly compounding. What's the monthly payment amount? Final answer would be 197.85. 2.A young couple decide to take advantage the current first-time home buyer credit and buy a new house. With their combined income, they can afford to make a...
21. A company estimates an NPV of a project under three different set of ossumptions (Beor,...
21. A company estimates an NPV of a project under three different set of ossumptions (Beor, Bose, Bull) to evoluate forecasting iskj management agrees to undertoke the project if the weighted average NPV for Based on the scenario analysis performed, the Fohe? Evoluate the a. True b. Fose Today is lonuery 1, 2019 (T-O,. You take out a 6 yeor fully omortizing outo loan of $23,000. Payments ore mode at the end of each colender mant he loon hos o...
No need for Explanation
and you can skip Q 21
21.A company estimates an NPV of a project under three different set of assumptions (Bear, Base, Bull) to evaluate forecasting risk; management agrees to undertake the project if the weighted average NPV for the three different scenarios (Bear, Base, Bull) is positive. Based on the scenario analysis performed, the company will pursue the proiect. Evaluate the underlined words in italics. True or False? Scenerio Bear Base Bull NPV Probability 30.00%...
you can skip Q 21
5. Assume you are a sell-side analyst and you cover the widget
industry. In 2018, Big Widget Company decided to double
manufacturing capacity by issuing debt in order to capitalize on
the growing demand for widgets. Assume that the company was able to
realize scale economies through increased buying power. Any benefit
from these scale economies was offset by borrowing money at a much
higher interest rate than existing long term debt. Using 5-Stage
DuPont...
Today is January 1, 2020 (T=0). You take out a 30 year fully amortizing mortgage of $400,000. Payments are made at the end of each calendar month. The loan has a fixed annual rate of 4.0% (or 4.0%/12 per month). How payments will you have to make until you have at least $300,000 of equity in your home? a. 32 b. 33 c. 109 d. 110 e. 111
24. During lecture we illustrated how the profitability of different types of companies can change as the economy moves through a business cycle of 7-10 years. A company like Molson-Coors Brewing Company (which trades under the ticker TAP) would best be described as a When economic conditions deteriorate (e.g. during the housing crisis), TAP's operating margin would most likely a. non-cyclical company b. cyclical company C. non-cyclical company d. cyclical company e. non-cyclical company increase significantly decrease significantly decrease significantly...
You need to borrow $200,000. E-Click loans will make a 30 year, fully amortizing mortgage loan with monthly payments, with no points at an interest rate of 8%. (a) Construct a loan amortization schedule for the first 4 months of the loan. (b) What is the principal amount of your loan outstanding after 7 years (84 months) of making payments? Show that you can determine this by finding the FV of the loan after 7 years. Highlight your final answer
21. A company estimates an NPV of a project under three different set of ossumptions (Beor, Bose, Bull) to evoluate forecasting iskj management agrees to undertoke the project if the weighted average NPV for Based on the scenario analysis performed, the Fohe? Evoluate the a. True b. Fose Today is lonuery 1, 2019 (T-O,. You take out a 6 yeor fully omortizing outo loan of $23,000. Payments ore mode at the end of each colender mant he loon hos o...
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