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Credit Limit. Refer to question. What will Mary and Marty's credit limit be if the bank uses the market value of equity to determine their credit limit and will loan them 70% of the equity?
QuestionCredit Limit. Mary and Marty are interested in obtaining a home equity loan. They purchased their house five years ago for $125,000 and it now has a market value of $156,000. Originally, Mary and Marty paid $25,000 down on the house and took out a $100,000 mortgage. The current balance on their mortgage is $72,000. The bank uses 70% of equity in determining the credit limit.
What will their credit limit be if the bank bases their credit limit on equity invested and will loan them 70% of the equity?
Calculate NPV, Payback, Discounted Payback, IRR and Modified IRR for the following project
A factory forecasts to produce the following cash flows: Year 1 - $6516, Year 2 - $7000, Year 3 - $11400, Year 4 onward in perpetuity - $12000. If the cost of capital is 6%, what is the factory's present value?
Calculate and provide the annual sales revenues and costs. - Why is it important to include inflation when estimating cash flows?
The M&M theory states it does not make any difference from an economist’s view whether a firm raises financing as equity or debt. However floatation costs are more for equity than debt and interest on debt is tax deductible whereas dividends are not...
Ten years ago you invested $1,000 for 10 shares of Providien, Inc. common stock. You sold the shares recently for $2,000. While you owned the stock it paid $10.08 per share in annual dividends. What was your rate of return on Providien stock?
Stuandlu, Corp have financing needs for $385,000 in Assets for the new dog treat company they started. The low liquidity return on assets is likely to be 16% and the high liquidity return is likely to be 9%. Their financing options are short-term for..
The agreed upon contract price was $2,250,000. By December 31 of the first year, Kinne Construction finished approximately one-third of the construction on the building (as agreed upon by the A/E) and subsequently billed Sitzabee Inc. $800,000. What ..
Suppose you buy both a European put and call options on the same security with both options is expiring in 6 months and both having strike price equal to the initial value of the security. Under what condition this is a reasonable investment?
Emily is comparing two bonds that she is thinking about purchasing. One is a municipal bond issued by her home state with a 4% yield that would be free from both federal and state taxation. Emily is in the 25% federal tax bracket and the 5% state tax..
The Bradley corp. produces a product with the following costs as of july 1, 2014. Material $4 per unit, labor 4 per unit, overhead 2 per unit. Beginning inventory at these costs on July 1 was 3,250 units. from July 1 to December 1, 2014 Bradley produ..
Suppose the spot price for Euro is $1.15, the futures price for delivery in 6 months is $1.1471286. Assume that the 6 month borrowing/lending rate in Euro is 0.75percent (annually, continuous compounding) and the corresponding rate in $ is 0.25percen..
What information must you provide when placing an order to buy or sell stock? What is a ticker symbol, and why is it important?
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