Opportunity cost of capital

Assignment Help Accounting Basics

Reference no: EM13128912

After four years, mortgage rates drop to 8 percent for 30-year fixed-rate mortgages. You still have the old 10 percent mortgage you signed four years ago and you plan to live in the house for another five years. The total cost to refinance the mortgage is $3,000 including legal fees, closing costs and points. The rate o a five-year CD is 6 percent. Should you refinance your mortgage or invest the $3,000 in a CD? The 6 percent CD rate is your opportunity cost of capital.

Reference no: EM13128912

Questions Cloud

Determining integral function : The rate of change of the frequency (f) of an electronic osillator with respect to the inductance (L) is df/dL = 80(4 + L)^-3/2, find (f) as a function of (L) if (f) = 80 Hz for L = 0H.

How would i list the following aldehydes in terms : How would I list the following aldehydes in terms of increasing reactivity ClCH2CHO, CH3CHO, Cl3CCHO, and Cl2CHCHO?

Find probability that on given night less rooms are rented : If it is assumed that the probability distribution for the number of room rentals forms a normal distribution, what is the probability that on a given night?

Length of curve by integration-quadratic equation : Consider that two particles are traveling the paths of the following functions: If each particle is to begin at one point of intersection at the same time and travel to the other point of intersection (at the same velocities)

Opportunity cost of capital : The rate o a five-year CD is 6 percent. Should you refinance your mortgage or invest the $3,000 in a CD? The 6 percent CD rate is your opportunity cost of capital.

Illustrate what is amount of the gain she must recognize : The building was subjected to a mortgage of $75,000 which Jo assumed. Her basis in the stock she surrendered was $10,000. Illustrate what is the amount of the gain she must recognize?

Computing average value of a function : The temprature recorded in a city during a given day approximately followed the curve of T=0.00100t^4-0.280t^2+25 where t is the number of hours from noon

How much nan3 must be used for each air bag : An airbag in?ates in less than 50 msec by the reaction of NaN3 to produce Na and nitrogen gas at 25 ?C. NaN3 → Na + N2 The volume of the airbag is about 30 liters, and it is ?lled to a pressure of 1.4 atm.

Fischer projections isomers enantiomers and stereocenters : Fischer projections, isomers, enantiomers and stereocenters, For 2,3-butanediol, there are 3 isomers; 2 are enantiomers, one is not.

User Account

All Pages