Agreed to accept annual payments

Assignment Help Financial Management
Reference no: EM13810828

Cromwell Enterprises is acquiring Athens, Inc. for $899,000. Athens has agreed to accept annual payments of $210,000 at an interest rate of 8.5 percent. How many years will it take Cromwell Enterprises to pay for this purchase?

Reference no: EM13810828

Questions Cloud

How much interest would you pay over the life of the loan : You and your spouse are planning on buying a $200,000 house. Your bank is willing to give you a 30 year mortgage loan at 6.12%APR with monthly repayments. How much interest would you pay over the life of the loan?
What were the dividends paid by the firm : The year-end 2010 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $3,000,000 and retained earnings at $5,300,000. The next year, retained earnings were listed at $5,600,000. The firm’s net income in 2011 was $1,090,000...
C&a identifies two location alternatives : C&A identifies two location alternatives. Chicago has annual fixed costs of $20,000 and variable costs of $50 per unit. New York has annual fixed costs of $55,000 and variable costs of $100 per unit. For what range of output would New York be superio..
Calculate after-tax cash flow at disposal : Reversing Rapids Co. purchases an asset for $152,582. This asset qualifies as a five-year recovery asset under MACRS. The five-year expense percentages for years 1, 2, 3, and 4 are 20.00%, 32.00%, 19.20%, and 11.52% respectively. Reversing Rapids has..
Agreed to accept annual payments : Cromwell Enterprises is acquiring Athens, Inc. for $899,000. Athens has agreed to accept annual payments of $210,000 at an interest rate of 8.5 percent. How many years will it take Cromwell Enterprises to pay for this purchase?
The probability of a favorable pilot study : THe probability of a favorable pilot study is 60%. At this time, there will be an 80% chance that the new shopping center will make a profit of $400 million and 20% chance that there will be a loss of $100 million. What decision should be made and wh..
Warrants-Recently issued two types of bonds : Gregg Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with an 8% annual coupon. The second issue consisted of 20-year bonds with a 6% annual coupon with warrants attached.
Should elio joint venture with bostrom : Should Elio joint venture with Bostrom? Should it partner with a tier-one or a tier-two automotive supplier?
Outstanding bond issues-require semi annual interest payment : Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semi annual interest payments. Bond A has a coupon rate..

Reviews

Write a Review

Financial Management Questions & Answers

  Interest compounded monthly

Linda borrows $18,500 from the bank at 12% APR interest compounded monthly to be repaid in 36 equal monthly instalments. What is her monthly payment? What is the interest paid in the first month? What is the principal paid in the first month?

  What analyses might a manager do to learn more about a

financial management 3 essay questions apa format250 words each question 2 cited sources each question.no

  Determine the cost of the cash discounts to warren

Warren Motor Company sells $30 million of its products to wholesalers on terms of "net 30." Currently, the firm's average collection period is 48 days. In an effort to speed up the collection of receivables, Warren is considering offering a cash disc..

  How do your competencies relate to the essential

1.how can knowing your ideal work culture help you in developing strategic and operational plans to achieve

  Supply has earnings before interest and taxes

Dharma Supply has earnings before interest and taxes (EBIT) of $524000, interest expenses of $325000 abd faces a corporate tax rate of 36 percent. What is Dharma Supply's Net Income? what would dharma net income be if it didn’t have any debt?

  Businesses must make long term investment decisions

Businesses must make long term investment decisions or sustainability. Critical questions such as which assets to invest in and at what cost to the organization are crucial to the future viability of the business. What is the role and importance of m..

  What is the firms breakeven point

Flying Bat Corporation is currently planning to start production of boat navigation systems. The firms selling price per unit is $410.58. Variable costs per unit $258.41. Interest expense is running at $50,000 per year, while fixed costs total $422,7..

  Explain van buren common stock

On the basis of your answers to Problems 21-1 and 21-2, if Harrison were to acquire Van Buren what would be the range of possible prices it could bid for each share of Van Buren common stock?

  The total direct costs of a debt issue

The total direct costs of a debt issue, when expressed as a percentage of gross proceeds, tends to do which of the following? Why?

  What is the maximum amount pierre should be willing to pay

Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon of 5.5 percent. If the current market rate is 7.25 percent, what is the maximum amount Pierre shoul..

  Find the present value of the annual savings

Blake Company has 3400 hourly workers. They work 40 hours a week, at the rate of $7.00 an hour, and they are paid every Friday. The company has decided to pay them twice a month. The cost of printing and processing each check is $1.25. The cost of ca..

  Retirement account today and expect to earn average return

You are depositing $3,200 in a retirement account today and expect to earn an average return of 8% per year on this money. How much additional income will you earn if you leave the money invested for 25 years instead of just 20 years?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd