What cash amount should mega electronics be willing

Assignment Help Accounting Basics
Reference no: EM133032248

Question - Jim and Jane would like to purchase a home theatre system for their newly renovated home. After extensive research online and visiting at a few local electronics store, they would like to purchase the newly released speaker package for $3,000.

(a) Mega Electronics are currently offering a deal of 12 equal monthly repayments with no interest charges. If Mega Electronics values money at 8.4% per year compounded monthly, what cash amount should Mega Electronics be willing to accept instead of the no-interest plan?

(b) Alternatively, GrandGuys offers the same no-interest plan but require a 10% deposit and an establishment fee of $15 both of which are payable immediately. GrandGuys also charges an account keeping fee of $2.95 per month due with each payment. What cash amount should GrandGuys be willing to accept with its no-interest plan on the speaker package ticketed at $3,000? In this case you can assume GrandGuys value money at 9.6% per year compounded monthly.

(c) Which shop offers a better deal for Jim and Jane? Explain briefly (2-3 sentences).

Reference no: EM133032248

Questions Cloud

Job analysis is colossal waste : Why do many managers say that Job Analysis is a colossal waste of their time and the time of their employees?
How much would be contributed to the plan : If the base percentage was 10% with a maximum excess percentage, how much would be contributed to the plan on behalf of Mark (disregard the salary deferral)
Relatively permanent change in behavior : Learning is defined as a "relatively permanent change in behavior that is brought about by experience"
What is the total cost of inventory of the unsold handbags : HBO consigned to GEO 10 laptops costing P15,000 each, paying freight charge of P15,000. What is the total cost of inventory of the unsold handbags
What cash amount should mega electronics be willing : If Mega Electronics values money at 8.4% per year compounded monthly, what cash amount should Mega Electronics be willing to accept
Marketing strategies for a business : Critically analyse all relevant factors affecting the exchange process - developing insightful marketing strategies for a business.
Complete the statement of stockholders equity : Common Stock $2.5 par (150,000 shares authorized, 60,000 shares issued) 150,000. Complete the statement of stockholders equity
What is the value of the investment to you today : Question - You are valuing an investment that will pay you $28,000 per year for the first 4 years, what is the value of the investment to you today
What will the firm true cost of debt be : Costly Corporation plans a new issue of bonds with a par value of $1000, a maturity of 36 years, What will the firm true cost of debt be

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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