Answer:
54,075 Payment at Year 3
Explanation:
Because is an interest-only loan:
It will pay the principal completely and the interest for the year.
principal x rate = interest paid
50,000 x 0.0815 = 4,075
+ 50,000 principal
54,075 Payment at Year 3
<u>Remember:</u>
interes-only loan means during the life of the loan the monthly or annual payment are for the interest. At maturity, the principal is fully paid.
Answer:
Cost Benefit Analysis
Way of thinking that compares the cost of an action to its benefits.
Explanation:
I hope it helps.
Answer:
3.73%
Explanation:
The computation of the rate of interest that makes the equivalent is shown below:
As we know that
Present value=Cash flow × Present value discounting factor ( interest rate% , time period)
Let us assume the interest rate be x
where,
Present value of $400,000 is
= $400,000 ÷ 1.0x ^5
And,
Present value of $1,000,000 be
= $1,000,000 ÷ 1.0x^30
Now eqaute these two equations
$400,000 ÷ 1.0x^5 = $1,000,000 ÷ 1.0x^30
(1.0x^30) ÷ (1.0x^5) = $1,000,000 ÷ $400,000
1.0x^(30 - 5)=2.5
1.0x^25=2.5
1.0x = (2.5)^(1 ÷ 25)
x =1.03733158 - 1
= 3.73%
Answer:
Negative NPV.
Explanation:
present value of cost exceeds present value of revenue that is been assumed in the investment plan of the said company/firm.
Net Present Value describes one of the discounted techniques of cash flow used in capital budget to determining the viability of a project or an investment. It is seen to have a huge difference between the present flow of the firms; which is cash inflows and the present value of cash outflows over a period of time. Experts has tagged its primary advantage to be that it is seen to considers the concept of the time value of money.
