Annual percentage rate and effective annual rate

Assignment Help Financial Management

Reference no: EM132006544

1. Winnebagel Corp. currently sells 18,600 motor homes per year at $27,900 each, and 7,440 luxury motor coaches per year at $52,700 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 11,780 of these campers per year at $7,440 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,790 units per year, and reduce the sales of its motor coaches by 558 units per year.

Required :

What is the amount to use as the annual sales figure when evaluating this project?

$129,273,720

$194,890,800

$142,881,480

$87,643,200

$136,077,600

2. Which of the following statements about APR (Annual Percentage Rate) and EAR (Effective Annual Rate) is NOT true?

EAR is usually higher than APR if the compounding frequency is more than annual.

EAR is the real interest rate consumer pays.

APR considers compounding.

Truth-in-lending laws in the U.S. require that lenders disclose an APR on virtually all consumer loans.

Reference no: EM132006544

Questions Cloud

Discuss the consumer decision making process : Analyze a recent purchase decision you made using the steps in the consumer decision making process. The consumer decision making process is discussed.

Identify whether each party interpretation is reasonable : Prepare a 525- to 875-word strategic plan overview to resolve the legal dispute for the board (use the bullet point headings provided below to format.

What is the capitalized equivalent worth of an infinite : What is the Capitalized Equivalent worth of an infinite annuity of $1,000 paid every other year, when the interest rate is 11% annually?

Describe financial standards of ride sharing in the USA : Describe financial standards of ride sharing in the USA- include revenue & profit info & profit margin companies to focus on

Annual percentage rate and effective annual rate : Which of the following statements about APR (Annual Percentage Rate) and EAR (Effective Annual Rate) is NOT true?

What is the net future value of machine : Assume your time value of money (MARR) is 7% annually, and this machine lasts 6 years. What is the Net Future Value of this machine?

How many shares will he own after the reverse stock split : What is the anticipated price of the stock after the reverse stock split? How many shares will he own after the reverse stock split?

What is the discounted payback period : What is the discounted payback period (decimal years) for an investment of $48,000 with an annual investment income of $6,000 starting

Explain what points are possible : With a production possibility curve, explain what points are possible? are desirable? are impossible?

User Account

All Pages