A pottery factory purchases a continuous belt conveyor kiln for $64,000. A 7.2% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $605.73, over what term is this loan being paid? OA. 14 years OB. 15 years OC. 12 years OD. 13 years

A pottery factory purchases a continuous belt conveyor kiln for $64,000. A 7.2% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $605.73, over what term is this loan being paid? OA. 14 years OB. 15 years OC. 12 years OD. 13 years

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

See similar textbooks

Related questions

Q: Mark Welsch deposits $7,300 in an account that earns interest at an annual rate of 4%, compounded…

A: Given that:annual interest rate = 4% compounded quarterlyPeriod = 2 yearsPresent value = $7300

Q: A particular security's default risk premium is 5 percent. For all securities, the inflation risk…

A: The rate of return includes various risk premiums for taking on various risks. It includes a default…

Q: Ford Motor Co. current stock price is $30, and its last dividend was $1.20. The required rate of…

A: Data given,Current stock price (P0) = $30Last dividend paid (D0) = $1.20Required return (r) = 12%

Q: In January 2020, three-month (91-day) Treasury bills were selling at a discount of 158% What was the…

A: The annual yield of a Treasury bill (T-bill) represents the return an investor receives on their…

Q: You've collected the following information from your favorite financial website. 52-Week Price…

A: The dividend yield shows the rate of return earned from dividend income.The dividend yield is…

Q: An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to…

A: A zero coupon bond is a bond that does not pay any coupons. These bonds are issued at a discount and…

Q: The company falls in the 25% tax category for ordinary income and 40% tax category for capital…

A: Discount rate:In this scenario, the discount rate serves as the benchmark rate used to determine…

Q: What is the coupon rate of a eight-year, $5,000 bond with semiannual coupons and a price of…

A: Solution:-Coupon rate refers to the percentage of annual coupon amount to the face value of bond.So,…

Q: Aylmer-in-You (AIY) Inc. projects unit sales for a new opera tenor emulation implant as follows:…

A: The Internal Rate of Return (IRR) is a financial tool employed to assess the profitability of an…

Q: Trudy is 35 years old and is considering investing $2,000 per year in a savings account at 8%, or…

A: A Registered Retirement Savings Plan (RRSP) refers to a tax-advantaged investment account available…

Q: Ronald started his new job as a comrolier with Aerosystems today Carole, the employee benefes clerk,…

A: The objective of the question is to calculate the annual medical costs that Ronald would incur if he…

Q: Stock A Stock B 0.09 0.06 0.05 0.01 0.15 0.05 -0.04 0.01 0.08 -0.04 a. What are the expected returns…

A: Expected Return The expected return of an investment is the average return that an investor can…

Q: Assume these are the stock market and Treasury bill returns for a 5-year period: T-Bill Return Year…

Q: On May 17, Amy, an American investor, decided to buy three-month Treasury bills. She found that the…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: To establish a scholarship fund forever at Toronto Metropolitan University paying $10000 annually if…

A: The objective of the question is to calculate the amount of money needed to establish a scholarship…

Q: Question 9 (1 point) Which of the following brand was…

A: The question is asking to identify which of the given brands was once owned by Levi's.

Q: A 25 year bond pays 9% coupon and has a face value of $100. Suppose the initial yield is 9%. A)…

A: The bond price can be computed by using the PV formula function in the excel sheet where NPER,…

Q: Banyan Co.'s common stock currently sells for $43.25 per share. The growth rate is a constant 6%,…

A: The objective of the question is to calculate the cost of new equity for Banyan Co. given the…

Q: You own a bond with an annual coupon rate of 5% maturing in two years and priced at 87%. Suppose…

A: A bond is a financial instrument used by corporations, governments or other entities to borrow money…

Q: A UK-based firm has identified three variables that impacts its cash flow, hence risk associated…

A: The question is asking to understand the relationship between the cash flow of a UK-based firm and…

Q: Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130…

A: Rate of return on the investment has 2 components:(i) Annual income in the form of dividend,…

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: The net present value is the difference between the present value of the future cash flows and the…

Q: Consider the three stocks in the following table. Pt represents price at time t, and Qt represents…

A: The price-weighted index is simply the average price of all stocks in an index.The number of shares…

Q: Acme Inc. is expected to generate a free cash flow (FCF) of $5,840.00 million this year (FCF, =…

A: As the growth rate is constant from the end of year 3, we need to find the horizon value first.To…

Q: What is the present value of a $1000 future amount received in 17 years if the appropriate discount…

A: Given:Future Amount (FV) = $1000Discount Rate (r) = 11.7% APR = 0.117Number of years (n) = 17

Q: Expected rate of return and current yield) Time Wamer has bonds that are selling for $664. The…

A: The yield to maturity refers to the entire return that can be obtained by holding onto a certain…

Q: The value of a firm's future cash flows is estimated at 230M. The continuously compounded risk-free…

A: See the answer in the explanation field.Explanation:Answer information:Step 1:A1BC2Time 113Face…

Q: Builtrite needs to raise $2,000,000 for a plant improvement. It plans to sell $1000 par value bonds…

A: The value of a bond can be obtained by adding the present value of the bond's cash flows such as…

Q: Required: a. What are the standard deviations of stocks A and B b. Suppose that we were to construct…

A: The portfolio beta is the riskiness of the entire investment mix in relation to the market. It takes…

Q: The following table shows annual rates for various types of loans in 2021. Assume monthly payments…

A: A mortgage is a financial arrangement or loan that is typically used to purchase real estate, such…

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: Capital budgeting entails the systematic evaluation of prospective long-term investments or…

Q: Suppose we have the following returns for large-company stocks and Treasury bills over a six-year…

A: YearsLarge company stockUS Treasury…

Q: 32. Exactly five years from today. Prisha would like to buy an entertainment system with cash.…

A: The question requirement is to find the future value after 5 years from today. In order to find the…

Q: Canter Corp. purchased fifteen $1,000 4% bonds of Voltgo Corporation when the market rate of…

A: Bonds are a type of financial instrument that represents debt obligations issued by governments,…

Q: Required information [The following information applies to the questions displayed below.] Project Y…

A: Net present value means the difference between the present value of cash inflow and present value of…

Q: Consider the following information: Cash Flows ($) Project Co C₁ C₂ C3 C4 A -5,000 1,600 1,600 1,800…

A: The payback period shows the number of years it takes for a project to recover its initial…

Q: Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs.…

A: Increase in sales$9,500Annual operating cost$13,300Purchase and installation cost$50,100Estimated…

Q: (Compound interest) To what amount will the following investments accumulate? a. $5,000…

A: (a) Amount accumulated in 10 years = $12,968.71(b) Amount accumulated in 7 years = $13,710.59(c)…

Q: Determine the monthly volatility for these freight costs? (Answer to 3 decimal places) Determine the…

A: The standard deviation informs us how spread apart the statistics in a group are from the average. A…

Q: Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis philosophy when…

A: Weighted average cost of capital refers to an expense associated with raising funds from outside…

Q: The following information is provided about a stock market index m and security i: Statistic Value…

A: Beta of stock shows how much stock is volatile related to the market and how much is going to be the…

Q: Company A and Company B have the same assets. Company B is more highly levered. Which company has a…

A: Company A and Company B have the same assets. Company B is more highly levered. Which company has a…

Q: Taussig Corp.'s bonds currently sell for $910. They have a 6.35% annual coupon rate and a 20-year…

A: Face value = $1,000Coupon rate = 6.35%Years to maturity = 20 yearsCurrent price = $910Call price =…

Q: $2,416pa received at the beginning of each year for 12 years where your client requires a yield of…

A: Annual payment=$2416Number of payment=12Required rate=r=6%Calculate value of investment.

Q: What is the break-even cost per

A: Break-even cost:The break-even point is the point at which total cost and total revenue are equal,…

Q: Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is…

A: So the final answer i.e., cost of Preferred stock is = 13.07%Explanation:Cost of preferred stock =…

Q: The loan will have a term of 54 months and monthly payments of $385.13. The interest rate on the…

A: Data givenMonthly payment = $385.13Number of monthly payments = 54Interest rate = 8.84% compounded…

Q: State of Economy Bust Boom Probability of State of Economy 0.40 0.60 Security Returns if State…

A: Security return if state occursState of economyProbability of state of the…

Q: You are given the following information on Parrothead Enterprises: Debt: Common stock: 9,100 6.3…

A: Weighted Average Cost of Capital, is a financial tool that calculates a company's overall cost of…

Q: Required: a. If CM 12%, calculate the variance of returns of securities A, B, and C b. Now assume…

A: Variance indicates the amount that a bunch of numbers deviates from the average. There is less…

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

A pottery factory purchases a continuous belt conveyor kiln for $64,000. A 7.2% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $605.73, over what
term is this loan being paid?
OA. 14 years
OB. 15 years
OC. 12 years
OD. 13 years

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define method of calculation

VIEW

Step 2: Calculates number of periods

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000
A pottery factory purchases a continuous belt conveyor kiln for $68,000. A 6.3% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $765.22, over what term is this loan being paid?
A pottery factory purchases a continuous belt conveyor kiln for $48,000. A 6.2% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $428.13, over what term is this loan being paid? A. 14 years B. 15 years C. 13 years D. 12 years Please use BA II where applicable.
A truck costing $118,000 is paid off in monthly installments over four years with 8.7% APR. After three years the owner wishes to sell the truck. What is the closest amount from the following list that he needs to pay on his loan before he can sell the truck? A. $40,127 B. $26,751 C. $33,439 D. $46,815
A house costs $142,000, It is to be paid off in exactly ten years, with monthly payments of $1,779.64. What is the APR of this loan? A. 6.75% O B. 8.75% C. 7.75% O D. 9.75%
A house costs $147,000. It is to be paid off in exactly ten years, with monthly payments of $1,783.52. What is the APR of this loan? A. 6% B. 8% C. 7% D. 9% Please use BA II where applicable.
A construction company takes a loan of $1,322,000 to cover the cost of a new grader. If the interest rate is 7.95% APR, and payments are made monthly for five years, what percentage of the outstanding principal does the company pay in interest each month? A. 0.76% B. 6.63% C. 0.61% D. 0.71% E. 0.66%
A $38,000 new car loan is taken out with the terms 12% APR for 48 months. How much are monthly payments on this loan? O A. $1,300.89 B. $1,200.82 C. $1,100.75 D. $1,000.69
An engineer wants to purchase a house for $100,000 and has $20,000 cash to use as the down payment. The bank offers a loan for the remainder at 9% nominal interest with the term of the loan being 20 years and monthly payments. Assuming the payment is the same for all months, the monthly loan payment is close to: a. $720 b. $689 c. $572 d. $741
Lush Gardens Co. bought a new truck for $58,000. It paid $6,380 of this amount as a down payment and financed the balance at 4.70% compounded semi-annually. If the company makes payments of $1,800 at the end of every month, how long will it take to settle the loan? o years o months Express the answer in years and months, rounded to the next payment period 13 SUBMIT QUESTION SAVE PROGRESS
A house costs $133,000. It is to be paid off in exactly ten years, with monthly payments of $1,641.90. What is the APR of this loan? OA. 7.4% B. 6.4% O C. 8.4% O D. 9.4%
Find the monthly house payments necessary to amortize the following loan. Then calculate the total payments and the total amount of interest paid. $201,000 at 7.02% for 15 years Question content area bottom Part 1 The monthly payments are (Round to the nearest cent.) Part 2 The total amount paid on the loan is (Round to the nearest cent.) Part 3 The total amount of interest paid is (Round to the nearest cent.)