a.  If the interest rate on the loan is 12%, how long will it take for her to repay the loan fully?   b.  How long will it take if the interest rate is 9%?   c.  How long will it take if she has to pay 15% annual interest?   d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully.

Q: Badger Corp. has an issue of 6% bonds outstanding with 6 months left to maturity. The bonds are…

A: Variables in the question:FV=$1000Coupon rate=6% (pay interest semiannually)n=0.5 yearPV=$993.02Tax…

Q: c) Nico owns 100 shares of stock X which has a price of R12 per share and 200 shares of stock Y…

A: The expected return is the estimation of profit or loss that an investor determine from his…

Q: Bond value and time—Constant required returns    Pecos Manufacturing has just issued a 15​-year,…

A: Bonds refer to the instruments issued by companies for raising debt capital from non-traditional…

Q: .On 4th September 2019, the Dow Jones Industrial Average is closed at 26355.47, the value of DJIA…

A: To calculate the average market price of DJIA component stocks and the cost of a round lot of all…

Q: Which of the following contradicts weak form efficiency? Group of answer choices 1- Stock prices…

A: The Efficient Market Hypothesis (EMH) posits that stock prices fully reflect all available…

Q: Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Assets…

A: To maintain growth in sales and profit company needs to invest in fixed assets and current assets…

Q: Barcelona Machine Tools, Oriol D'ez Miguel S.R.L, a manufacturer of heavy duty machine tools near…

A: The given details are:Required: Calculate the cost to Saudi Arabia importer in JD, SRI, and US $.

Q: A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the…

A: Present value is the current value of a future cash flow or stream of cash flows, discounted to…

Q: Depreciation and accounting cash flow A firm in the third year of depreciating its only asset, which…

A: Working Note#1Computation of depreciation expense using 5 year MACRS : YearCost ($)Depreciation…

Q: a. What is the inflation premium? b. What is the fair interest rate on Moore Corporation 30-year…

A: A bond is a debt security issued by many large corporations and governments to borrow funds for a…

Q: the lottery. $250 million was the grand prize which will be paid in equal instalments over the next…

A: Present value is the equivalent value today of the future cash flow based on the discount rate and…

Q: ou are a marketing executive and your ad agency has come to you with a recommendation for a…

A: Maximum price that one is going to pay is present value of benefits from the investment done in the…

Q: The correlation between A and B is -0.05. Alice formed Portfolio X by investing in A and B. The…

A: Standard deviation is the measure of the deviation of the mean return and is the measure of the risk…

Q: I drink coffee every weekday (assuming for 20 days each month). One cup of coffee costs $4.4. I buy…

A: Future Value is a financial concept that represents the projected value of an investment, savings,…

Q: Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be…

A: Decision-makers may more readily evaluate options with the help of annual worth analysis, which…

Q: 2.2 Sezela Limited, has just sold 100 000 shares in an initial public offering. The underwriter's…

A: Here,IssuePrice is R40Issue Price after IPO is R44No. of Oustanding Shares is 100,000Explicit Fees…

Q: Thanks to the acquisition of a key patent, your company now has exclusive production rights for…

A: Net present value (NPV) is the difference between the current worth of cash inflows and outflows…

Q: In January, an investor purchased a European-style April call option on ABC and an American-style…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: A couple will retire in 50 years; they plan to spend about $34,000 a year (in current dollars) in…

A: An annuity refers to a series of periodic payments that are made in exchange for a lump sum payment.…

Q: Determine the present value of the income from cotton 4 years from now for full water application…

A: The given details are:Inflation rate is 5%Required: Determine the present value of the income:(1)…

Q: Finding operating and free cash flows Consider the balance sheets and selected data from the income…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: You just graduated from college and are starting your new job. You realized the importance to save…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: Using the following three-step binomial tree to compute the price of an European call option with…

A: A European call option is a financial contract that gives the holder the right, but not the…

Q: Suppose that an annuity will provide for 20 annual payments of 1400 dollars, with the first payment…

A: The problem statement requires calculating the present value of a deferred annuity that is going to…

Q: (a)Jack is considering investing in the stocks. The two stocks are available with the following…

A: Capital asset Pricing Model is the method to calculate the expected rate of return of the stock or…

Q: On January 1, 2020, ABC Co. borrowed P5,000,000 from a bank at a variable rate of interest for 4…

A: Investors should be aware of and employ the benefits of hedging as a financial strategy because of…

Q: GUESS store wishes to assess the value of its ladyline division. This division has N$300000…

A: Free cash flow refers to the net operating profits after tax or the earnings of the company for the…

Q: Arithmetic and Geometric Returns (LO1) A stock has had returns of 9%,21%,32%,-18%,27%, and -12% over…

A: YearsStock's Returns19.00%221.00%332.00%4-18.00%527.00%6-12.00%Required: a) Average return=?b)…

Q: 2. The information released on a particular corporation at closing shows a Chg of 4.85. WF does this…

A: In the stock market there is open trading of stocks and prices move up and go down and this happens…

Q: Describe the role of a financial analyst in a financial institution such as a bank or investment…

A: A financial analyst is a professional who assesses financial data, conducts research and provides…

Q: urrent assets xed assets $30,000,000 70,000,000 Current liabilities Notes payable $100,000,000…

A: Capital structure consists of debt, equity and loans. For calculating cost of capital weights are…

Q: Pecos Manufacturing has just issued a 15​-year, 15​% coupon interest​ rate, $1,000​-par bond that…

A: Bonds refer to the instruments issued by companies for raising debt capital from non-traditional…

Q: Need more explaniation for part C but I don't think it's the right answer. I got a different answer…

A: Preferred stocks carry a fixed rate of dividend and these are preferred in payment of dividends as…

Q: Mullet Technologies is considering whether or not to refund a $75 million, 13% coupon, 30-year bond…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: Depreciation In early 2019, Sosa Enterprises purchased a new machine for $11,800 to make cork…

A: Variables in the question:Cost of new machine=$11,800Recovery period=3 yearsUsing MACRS depreciation

Q: Question A     It's the first day of the year and you currently have $4,000 in the bank. You plan…

A: Given information,Present value: Payment per period: Time:  yearsCompounding frequency: YearlyRate:…

Q: A 20-year maturity bond with par value of $1,000 makes semiannual coupon payments at a coupon rate…

A: Bonds refer to instruments issued by companies to raise debt capital from non-traditional sources.…

Q: 9. A 3-year dual currency AA rated bond (Euro-USD) pays a 5% annual coupon in Euros (on a par value…

A: The forward rates are computed using the spot rates using the given formula:In the given question…

Q: A two-year amortizing bond has a coupon rate of 4% and pays its coupons semi- annually. Coupon…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: An engineer in 1950 was earning $6,100 a year. In 2020, she earned $81,000 a year. However, on…

A: Inflation refers to an increase in the overall price of commodities over a period. It is used to…

Q: Given the folllowing liability portion of the balance sheet and the market value of equity of $100M,…

A: Accounts payables$20.00Accrued expenses$10.00Loans payable$40.00Short-term notes$50.00Other current…

Q: You are given the following information for Troiano Pizza Company: sales $78,500; costs $38,200;…

A: sales = $78,500 costs = $38,200addition to retained earnings = $6,950 dividends paid = $2,490…

Q: Ben Ramsay works for an investment company and is currently negotiating with three potential…

A: There are 3 investors and 2 type of investments Investment Alpha and Investment Beta. We have to…

Q: A share of stock is worth the present value of all the cash flows an investor in said share of stock…

A: As per the concept of time value of money the value today of any financial asset, any financial…

Q: Joshua sold his bike for 10% less than he paid for it. If he sold the bike for $585, how much did he…

A: Selling Price of Bike = $ 585loss on Selling = 10% of Purchase PricePurchase Price = ?

Q: he longer the time horizon to an investment's maturity, the ________ the expected risk and the…

A: When money is invested in the market there is risk and risk depends on many factors and the return…

Q: AMRO Financials is quite certain that interest rates are going to decrease next month.  How should…

A: AMRO Financials is facing a scenario where they anticipate a decrease in interest rates in the…

Q: Investment Option "South" This potential investment is less risky and shorter term, so it has a…

A: Present value is the current value of all future cash flows being discounted at a predefined rate of…

Q: t Donvan, the president of Munoz enterprises, is considering two investment opportunities. Because…

A: Net present value can be found as the difference between present value of cash flow and initial…

Q: Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your…

A: The rate of return is the net return that an investment would generate over a period of time…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.