Reference no: EM131063125
Present Value of an Annuity
Carrie and Miranda earn the same salary. However, Miranda has been far more financially responsible. She pays her bills on time and pays off her credit card debt quickly. Carrie had been less financially responsible. She often buys too many shoes and has allowed her credit card balance to balloon. If she is short on cash for a month, she simply decides to not even pay the minimum balance due on her credit card. Now they both are looking to buy apartments. Miranda decides she can afford to make $3,500 payments, but Carrie can only make $1,500 payments and pay off her credit card debt, too. Miranda qualifies for a 6%, 30-year mortgage, but because of her bad credit rating Carrie will be charged 7.5 percent on a 30 year mortage. Both will put 20 percent down. How is Carrier's bad credit going to impact her apartment search?
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Family limited partnership is one option in estate planning
: A family limited partnership is one option in estate planning that is effective in certain situations. In this discussion, you explore situations appropriate for this option and consider the pros and cons.
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Calculated from the capital asset pricing model
: Investment in portfolio A has a standard deviation of 9%, while investment in portfolio B has a standard deviation of 14%. In order to tolerate the increased risk, what would you as an investor expect? The required rate of return for an investment ca..
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Prior to consideration of working capital
: A potential project with is expected to generate the following revenue per annum for the next 6 years with a after-tax operating cash flow margin of 20% (prior to consideration of working capital) from new business with a government agency. Now consi..
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What are the NPV and IRR of the project
: Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$ 950,000 1 285,000 2 345,000 3 415,000 4 255,000 All cash flows will occur in Erewhon and are expressed in dollars. ..
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About the present value of an annuity
: Carrie and Miranda earn the same salary. However, Miranda has been far more financially responsible. She pays her bills on time and pays off her credit card debt quickly. Carrie had been less financially responsible. She often buys too many shoes and..
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Calculate the firm new long-term debt added during year
: During the year, Belyk Paving Co. had sales of $2,398,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,427,000, $435,200, and $490,200, respectively. Calculate the firm's new long-term debt added during t..
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Calculate the before-tax and after tax costs of debt
: Currently, Warren industries can sell 15-year, $1,000 par value bonds paying annual interest at a 12% coupon rate. As a result of current interest rates, the bonds can be sold for $1,010 each; flotation cost of $30 per bond will be incurred in this p..
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What was the company change in net working capital
: The December 31, 2013, balance sheet of Maria’s Tennis Shop, Inc., showed current assets of $1,125 and current liabilities of $925. The December 31, 2014, balance sheet showed current assets of $1,340 and current liabilities of $1,015. What was the c..
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What was the firms cash flow to creditors
: The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,390,000, and the December 31, 2014, balance sheet showed long-term debt of $1,560,000. The 2014 income statement showed an interest expense of $93,000. What was the fir..
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