Decided to purchase capital asset

Assignment Help Financial Management

Reference no: EM132018221

For each of the following loan options (a & b) compute the following values:

- annual loan payment

- proportion of principle and interest in the first annual payment

- total interest paid over the entire time line of the loan

-total principal paid over the entire time line of the loan

a. You have decided to purchase a capital asset using an 850,000 at a rate of 8% for 25 years.

b. You have decided to purchase a capital asset for 850,000 at a rate of 7% for 15 years.

c. Which option would you take and why? Explain.

Reference no: EM132018221

Questions Cloud

What is the profit from transaction from finance perspective : What is the profit from the transaction from a finance perspective (adjusting for the TVM)?

Create a summary for your proposal : You will create a summary for your proposal that will be submitted this week as well as a part of the final project in Week 8. Attached is my week 1 proposal.

Insurer buy now to fully fund expected cash outflow : How much strips (in dollar amount) must the insurer buy now to fully fund the expected cash outflow (to the nearest dollar) in 8 years?

What is the intrinsic value of the option : If the put option is trading for $5.25, what is the intrinsic value of the option?

Decided to purchase capital asset : You have decided to purchase a capital asset using an 850,000 at a rate of 8% for 25 years.

Reasons for recent growth of international business activity : What are the basic reasons for the recent growth of international business activity? How has technology contributed to the globalization of markets and product?

Discussion on project management advice : Thinking back on everything you have learned in this course, identify the top three (3) most topics that anyone working in human resources needs to know about.

How fear can help or harm health promotion efforts : The text concludes that fear is a great motivator to avoid adverse health outcomes; do you agree with this perspective? Provide an example of how you believe.

What are the requirements and committments of the company : Suppose the following: You are an HR Director for a US-based company and are preparing to hire a Chinese citizen for a job in the U.S.

User Account

All Pages