The second house with the second lender

Assignment Help Financial Management
Reference no: EM131609674

Vivian wants to buy a house. The house she wants is listed for $300,000. If she make 20% down payment, she can get a FRM at 7.2% for 30 years. And Vivian decides to find another house to buy. She negotiates a price of $250,000 for the new house. She also did some looking and found a bank who would only require a $30,000 down payment, but they would charge a higher interest rate of 8.5% for 30 years for the second house. If she likes both houses equally, should she take the first house with the first lender, or the second house with the second lender? (which deal is less expensive?

Reference no: EM131609674

Questions Cloud

What is expected return on the portfolio : What is the expected return on the portfolio?
What is the standard deviation of the portfolio described : If the correlation between the returns of Security F and Security G is .21, what is the standard deviation of the portfolio described in part (a)?
The dealer incentive financing option : What is the total cost of this car if Sylvia chooses the dealer incentive financing option?
Most interested in spending the least amount of money : Assuming Sylvia is most interested in spending the least amount of money possible to purchase the car, which option should she choose?
The second house with the second lender : If she likes both houses equally, should she take the first house with the first lender, or the second house with the second lender?
Cash rebate or she takes dealer incentive financing : What are the respective monthly payments if she takes the cash rebate or she takes dealer incentive financing?
What is market value of the bond : A bond matures in 20 years, at which time it pays the owner $1000. what is the market value of the bond?
Preparing an analysis of investment opportunity for client : Assume that you are investment analyst preparing analysis of investment opportunity for client. Is this an investment that should be considered? Explain.
Growth rate in stock dividends and the cost of equity : If the firm is expected to provide a constant annual rate of growth in? dividends, what rate of growth must the firm? experience?

Reviews

Write a Review

Financial Management Questions & Answers

  Between canvas and connect

Over the course of the past 8 weeks, you've been introduced to many topics in finance. Which one(s) did you enjoy learning the most, and why? Between Canvas and Connect, you had access to supplementary resources so you would not have to rely on readi..

  What is the net proceeds from the debt issue

A firm issues $200 million straight bonds at an original issue discount of 7.5% and a coupon rate of 7%. The firm pays fees of 2.5% on the face value of the bonds. What is the net proceeds from the debt issue?

  Portfolio had arithmetic average return

Suppose a portfolio had an arithmetic average return of 11 percent for a 5-year period.

  Difference in the equivalent uniform annual cost

what is the difference in the equivalent uniform annual cost (EUAC) of buying Machine B compared to continuing to use Machine A:

  Explain what you should do today on foreign exchange markets

The 12-month interest rate on dollar-denominated assets (like bank deposits) is 5.00%. Explain what you should do today on the foreign exchange markets.

  Compute the cost of new common stock

Murray Motor Company wants you to calculate its cost of common stock. If a $3 flotation cost is involved, compute the cost of new common stock (Kn).

  What is the covariance between rush and oberman

what is the covariance between Rush and Oberman if there is a 0.70 probability that the economy will be in the state of boom and a 0.30 probability.

  Why might the managers of firms have different goals

Why might the managers of firms have different goals than the investors who buy the firms bonds?- How does the existence of rating agencies reduce this conflict between investors and firm managers?

  What is margin of safety in dollars

What is the margin of safety in dollars? What is the margin of safety percentage?

  Cost of Common Equity and WACC

Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. What is cost of common equity and wacc.

  Homeowners of the remote-controlled security system

You are a researcher at Brave New World Interactive Communications Company. Sales to homeowners of the remote-controlled security system (using the new gesture-recognition microchip) have dropped 40% in the last quarter. Determine what type of inform..

  What is the net asset value for this mutual fund

What is the net asset value (NAV) for this mutual fund?

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