Reference no: EM13847490
John Adams opened a bank saving account with $5,000 15 years ago. Today, the account balance is $$12,000. If the account paid interest compounded annually, how much interest on interest was earned?
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Should the plant make this investment?
: A proposed $2.5 million investment at a 70 MGY (million gallons per year) facility will save the facility $1.1 million/ year in energy costs. The equipment needs maintenance every 3 years (year 3, 6, 9), costing $300,000 and the equipment has a usefu..
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Fixed-rate mortgage-pay off any remaining loan balance
: You need a 30-year, fixed-rate mortgage to buy a new home for $225,000. Your bank will lend you the money at an APR of 5.5 percent with monthly compounding. You can only afford monthly payments of $1,000 for principal and interest, so you offer to pa..
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Raise funds through debt capital or equity
: Companies raise funds through debt capital (principally through bonds) or equity (common stock). More than 15 years ago the CFO of Home Depot spoke at Nova (I cannot remember the exact date due to my age). He was asked the following question: "Why do..
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Considering the purchase of a warehousing facility
: AMF Corporation is considering the purchase of a warehousing facility. AMF plans to finance this by borrowing the entire purchase price of the warehouse at a 10% annual interest rate for 20 years. If the purchase price of the warehouse is $200,000, w..
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The account paid interest compounded annually
: John Adams opened a bank saving account with $5,000 15 years ago. Today, the account balance is $$12,000. If the account paid interest compounded annually, how much interest on interest was earned?
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What was the annual percentage rate of consumer loan
: On February 1, 2013, Mr. Smith purchased $1,000 worth of furniture from a furniture store. The purchase was financed by a consumer loan which required Mr. Smith to pay a monthly payment of $37.78 at the end of each month for three years. What was the..
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What is the earnings and dividend per share figure
: Draiman, Inc., has sales of $600,000, costs of $258,000, depreciation expense of $63,500, interest expense of $30,500, and a tax rate of 40 percent. The firm paid out $43,500 in cash dividends and has 55,000 shares of common stock outstanding. What i..
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Describe how acquisition affects number balance sheet
: The book value of Little Statistic’s total assets is $400,000. Suppose Number Crunching Inc. acquires Little Statistic’s assets for $1 million and finances the purchase by selling $600,000 in new stock, $300,000 in new debt, and reducing cash by $100..
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Why is this figure different from its accounting income
: During 2011, Lele Design earned net income of $250,000. The firm neither bought nor sold any capital assets. The book value of its assets declined by the year’s depreciation charge of $200,000. The firm’s operating cash flow for the year was $450,000..
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