Firm annual payment be if it signs up for this mortgage

Assignment Help Financial Management
Reference no: EM131850395

1. In the efforts to shore up its image by promoting “corporate social responsibility and good citizen” (hoping to increase its market share, too!), a major local corporation decides to donate $2,000,000 to support the activity of a consortium of local charity organizations. If the consortium can invest the donated money in a Treasury security that yields a guaranteed annual rate of return of 2.5%, what is the amount that the organization would be able to draw out each year, forever?

2. BTU Inc. is thinking of purchasing a house. The house costs $350,000. The firm has $50,000 in cash that it can use as a down payment on the house, but it needs to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. What will the firm’s annual payment be if it signs up for this mortgage?

Reference no: EM131850395

Questions Cloud

What is a spoofing attack : What is a spoofing attack? Briefly provide two common types of spoofing attacks executed by adversaries to attack access control.
Annual interest rate on the deposited funds : Assume the firm can earn a sure 6% annual interest rate (return) on the deposited funds
Evaluate how your chosen firm uses lobbying strategies : Evaluate how your chosen firm uses lobbying strategies. A good source of information to assist you in addressing these questions is the annual reports of firm.
What are the difference between you and the yungs : What are the difference between you and the Yungs? Why are these friends fighting?
Firm annual payment be if it signs up for this mortgage : BTU Inc. is thinking of purchasing a house. What will the firm’s annual payment be if it signs up for this mortgage?
Truth-table for the translated argument : After translation into SL, each student must construct a direct (full, exhaustive) truth-table for the translated argument
Purpose of sex or obviates valuable life : Contraception is not right if it violates the purpose of sex or obviates valuable life. Some acts of contraception obviate valuable life
Investment opportunity that requires initial investment : You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000 in one year. What is the IRR of this opportunity?
Kinds of people on a mysterious island : There are two kinds of people on a mysterious island. There are so-called Honestants who speak always the truth, and the others are Swindlecants who always lie.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the principal balance on the loan

You take out a 30-year $450,000 mortgage loan with an APR of 7.75 percent and monthly payments. In 16 years you decide to sell your house and payoff the mortgage. What is your monthly payment? What is the principal balance on the loan? What is your t..

  About the time they spend per week on leisure activities

A past study claimed that adults in America spent an average of 18 hours a week on leisure activities. A researcher wanted to test this claim. She took a sample of 12 adults and asked them about the time they spend per week on leisure activities.

  The profitability index method of capital budgeting

If (1) the compound rate has been increased and (2) the compounding period has been decreased, what impact would this have on the future value of your deposit? The decision criterion in the profitability index method of capital budgeting is to accept..

  What is the theoretical futures price

Suppose there is a financial asset ABC, which is the underlying asset for a futures contract with settlement six months from now. You know the following about this financial asset and the futures contract: What is the theoretical (or equilibrium) fut..

  Use the three notions of present value-future value and irr

Would you give the same answer if the interest rate were 2%? use the three notions of present value, future value and IRR.

  Issue of preferred stock outstanding

Rabie, Inc., has an issue of preferred stock outstanding that pays a $5.00 dividend every year, in perpetuity. If this issue currently sells for $80.10 per share, what is the required return?

  What will be the after-tax cash flow of this sale

Suppose you sell a fixed asset for $128,000 when it's book value is $161,000. If your company's marginal tax rate is 28%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

  The current price of non-dividend-paying stock

The current price of a non-dividend-paying stock is $51. Over the next year it is expected to rise to $62 or fall to $41. Assume the risk free rate is zero.

  The gordon growth model of stock valuation

Please use the following information and the Gordon Growth Model of stock valuation to calculate the current market price of a share of Triple M Corporation:

  What is the flotation cost adjustment

What is the flotation cost adjustment that must be added to its cost of retained earnings?

  Result in initial aftertax cash savings

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.73 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. The firm has a target debt−equity ratio..

  What is the company target debt–equity ratio

Goodbye, Inc., recently issued new securities to finance a new TV show. The project cost $13.3 million, and the company paid $655,000 in flotation costs. If the company issued new securities in the same proportion as its target capital structure, wha..

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