Check my work10 percent. Thirty thousand dollars in out-of-pocket costs will be incurred. For a public issue, the interest rate will be 9 percent, and theunderwriting spread will be 2 percent. There will be $100,000 in out-of-pocket costs. Assume interest on the debt is paid semiannually,and the debt will be outstanding for the full 20-year period, at which time it will be repaid. Use Appendix B and Appendix D for anapproximate answer but calculate your final answer using the formula and financial calculator methods.a. For each plan, compare the net amount of funds initially available-inflow-to the present value of future payments of interest andprincipal to determine net present value. Assume the stated discount rate is 12 percent annually. Use 6.00 percent semiannuallythroughout the analysis. (Disregard taxes.)Note: Assume the $1.00 million needed includes the underwriting costs. Input your present value of future payments answersas negative values. Do not round intermediate calculations and round your answers to 2 decimal places.Private PlacementPublic IssueNet amount to Landers$970,000.00Present value of future paymentsNet present value$970,000.00$0.00

Net Amount to Lenders:This is the initial amount available after out-of-pocket costs: $1,000,000…

Answered: Check my work 10 percent. Thirty…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 24P

See similar textbooks

Similar questions

16. You borrow $27,000 to purchase a plane. The loan will be paid in monthly installments over one year at 30% interest annually. The first payment is due one month from today. What is the amount of each monthly payment? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Suppose we need to make 10 end-of-year payments of $5, 000 to pay off aloan. Assuming the rate of interest is 5% compounded annually and using the prospective method, what is the outstanding loan balance immediately after the 5th payment? Please show all work.
Please show all formulas and the process in Excel for each question. You borrow a GPM of $450,000 with annual payments and 15-year term. The interest rate is 4.5% and the payment factors from year 1 to year 15 are: 50%, 50%, 50%, 50%, 50%, 75%, 75%, 75%, 75%, 75%, 100%, …, 100%. Questions: What are the annual payments for years 1 to 15? What is remaining balance at the end of each year? What are the interest payment and principal payment for years 1 to 15? Answer the questions (1) to (3) above if annual payment is changed to monthly payment.
An ARM for $100,000 is made at a time when the expected start rate is 5 percent. The loan will be made with a teaser rate of 2 percent for the first year, after which the rate will be reset. The loan is fully amortizing, has a maturity of 25 years, and payments will be made monthly. Required:a. What will be the payments during the first year?b. Assuming that the reset rate is 6 percent at the beginning of year (BOY) 2, what will the payments be?c. By what percentage will the monthly payments increase?d. If the reset date is three years after loan origination and the reset rate is 6 percent, what will the loan payments be beginning in year 4 through year 25
CZ Enterprises borrows $202,775 at an interest rate of 10% today and will repay this amount by making 10 semiannual payments. Payments begin in six months. What is the amount of the payments that CZ will need to make? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest cent, $X.XX.) CZ will need to make payments of $ 26,260.31.
An ARM for $101,800 is made at a time when the expected start rate is 5 percent. The loan will be made with a teaser rate of 2 percent for the first year, after which the rate will be reset. The loan is fully amortizing, has a maturity of 25 years, and payments will be made monthly. Required: a. What will be the payments during the first year? b. Assuming that the reset rate is 6 percent at the beginning of year (BOY) 2, what will the payments be? c. By what percentage will the monthly payments increase? d. If the reset date is three years after loan origination and the reset rate is 6 percent, what will the loan payments be beginning in year 4 through year 25?
Answer the following questions using Excel's RATE, NPER, PMT, PV and FV functions. 1. If you contribute $1000.00 into an RRSP every six months for fifteen years and interest on the deposits is 8% compounded semi-annually, how much would the balance in the RRSP be after the last contribution?
A demand loan of $5000.00 is repaid by payments of $2500.00 after two years, $2500.00 after four years, and a final payment after six years. Interest is 99% compounded quarterly for the first two years, 10% compounded monthly for the next two years, and 10% compounded annually thereafter. What is the size of the final payment? The final payment is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
a demand loan of 7000$is repaid by payments of 3500$ after two years, 3500$ after four years and a funal payment after seven years. interfest rate is 9% compunded quarterly for the first two years, 10% compoiunded annuannly for the next two years, and 10% compounded mointhly thereafter. what is the size of the final payment?
You need $24,856 at the end of nine years, and your only investment outlet is a 10 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. Use Appendix B and Appendix C. (Round "PV Factor" to 3 decimal places. Round the final answers to nearest whole dollar.) a. What single payment could be made at the beginning of the first year to achieve this objective? Single payment made $ 10544 b. What amount could you invest at the end of each year annually for nine years to achieve this same objective? Amount to be paid $1830,41
(Loan Amortization Problem) Your company is planning to borrow $2,500,000. This will be a six-year, 2 percent per year, annual payment, fully amortized term loan. The first payment will be made one year from today. What fraction of the total annual payment made at the end of year three will represent repayment of principal? [Hint: you need only complete the first three rows of the amortization schedule to answer this question.] Step By Step please, as if writing down the solution on a sheet of paper.
You borrow a GPM of $120,000 with annual payments and 30-year term. The interest rate is 10% and the payment factors from year 1 to year 30 are: 10%, 20%, 30%, 40%, 50%, 60%, 70%, 80%, 90%, 100%, …, 100%. Questions: What are the annual payments for years 1 to 30? What is remaining balance at the end of each year? What are the interest payment and principal payment for years 1 to 30?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS