How much debt is outstanding if the present value of a perpetual tax shield is $350,000, the tax rate is 21% and the interest rate on the debt is 10%? O$300,000 O $1,428,571 O$3.000,000 $1,666,667

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated as the present value of quarterly payments, The present value…

Q: 49) Find the interest on P5000 at 7% for 3 years. C. P2,142.86 D. P1,050 A. P11,666.67 В. Р10,500…

A: 49) Principal (P) = P 5000 r = 7% n = 3 years

Q: If your gross income is OMR 1800 per month, and you need a housing loan. What is the maximum amount…

A: 28/36 rule states that an individual should not spend more than 28% of their gross monthly income on…

Q: If P20,000 is borrowed for 200 days at 12% per annum simple interest. How much will be due at the…

A: Simple interest measures the interest payment on the principal amount borrowed for a period of time.…

Q: Assume a $620,000 loan over a 20 year period at a fixed rate of 5.85%. How much would a borrower…

A: Loan amount "PV" = $620000 Annual rate = 5.85% Monthly rate "r" = 5.85%/12 NUmber of years = 20…

Q: What is the present value of a perpetuity with the annual payment of $4,000 at the annual interest…

A: The present value is used to estimate the current value of a future payment or cash flow. It entails…

Q: What is the amount of compensating balance would be required for a nominal interest rate of 12% to…

A: Nominal interest rate (r) = 12% Effective interest rate (i) = 14.40% Let the compensating balance as…

Q: 1. You have the following information Interest charges = JD 50 000 per year Tax rate = 40% Net…

A: Given: Interest charges =JD 50000 per yearTax rate =40%Net Income =JD 90000

Q: D. A man deposits P50, 000 in a bank account at 6% compounded monthly for 5 years. If the inflation…

A: Future value- Future value is the estimated value of an asset in the future, taking into account a…

Q: At an interest rate of 10% compounded annually, Find P? $75,000 G = $1,500 $9,000 $6,500 $5,400 01 2…

A: P is the present worth of cash flows that are expected to happen in the future.

Q: You owe $1985.00 and $1794.00 in 5 months from now and 9 months from now respectively. What single…

A: Information Provided: Amount owed for 5 months = $1985 Amount owed for 9 months = $1794 Annual…

Q: A 1 year government treasury bill will pay you $1,000 when it matures 1 year from now (no…

A: Amount to be paid for treasury bill is the present value of the cash flows to be received in future.…

Q: What is the total interest / dividend amount to be repaid at the end of 1 year for a loan of 200 000…

A: simple interest formula: interest = principal×rate×time

Q: What is the present value of RM34,580 perpetuity per year discounted at 7%? Select one: a.…

A: In this problem we need to compute the present value of RM34,580 perpetuity per year discounted at…

Q: ment to

A: will reflect all the payments of annuity for 10 years (10*12=120 times) for the yearly interest rate…

Q: Company Z borrows EUR 1 million from the Bank at an annual interest rate of 3,5% for one year. The…

A: Tax shield Interest on the borrowed amount is a tax deductible item. So, it provides savings in the…

Q: Q6. A debt of $ 5700 is due, with interest at a = 8% in three years. It is agreed that the loan will…

A: Loan is a value which is borrowed from other sources for a particular time and person have to repay…

Q: Use the following amortization chart: Selling price of home $ 96,000 Down payment $ 5,000 Rate of…

A: The total cost of interest can be referred to as the amount that is paid by the borrower more than…

Q: 18. You are borrowing $700,000 for 30 years at 6% annually. The lender is charging you a 2 point…

A: Effective interest rate simply means annual interest rate. It contrasts the interest rates of two…

Q: Q3: An interest rate equal to 7% compounded annually: (a) If $20,000 is borrowed for 5 years what…

A: Given information: Amount borrowed : $20,000 Time : 5 years Rate of interest : 7%

Q: 8. What is the equivalent worth in year 5 of the following series of income and disbursements, if…

A: Equivalent worth is the value based on the time value of money which is equivalent to all expenses…

Q: someone solve Question 3.12 while question 3.11 also given .solve it step by step not by excel

A: The given first question is based on equated annual installment

Q: 17. What is the present value of a $5,500 perpetuity starting in a year's time, then growing by 4%…

A: Option (A) $55,000Explanation:Given information, Cash flow at the end of year 1 (CF1) = $5,500Growth…

Q: b. If you borrow R13,000 at 8% compounded annually with the repayment schedule below, what is the…

A: Loan amount = R 13000 First payment of amount A occurs in year 2 and last payment is worth (A+600)…

Q: What is the present value of RM30,256 perpetuity per year discounted at 7%? Select one: a.…

A: Perpetuity refers to a sequence of payment i.e. periodic payments that are made by an investor into…

Q: Q6. What's the present value of a perpetutity that pays $1,524 per year if the aprropriate interest…

A: The objective of the question is to calculate the present value of a perpetuity. A perpetuity is an…

Q: 2. A bank loan of P6,000,000 charged at 9.65% pa compounded quarterly, is to be paid in 10 equal…

A: First we need to calculate effective annual interest rate Effective annual interest rate =1+inn -1…

Q: NOTES The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man…

A: Using excel PMT function to calculate each payment

Q: am. 120.

A: First, we need to calculate the monthly payment for the loan. This can be done using the formula for…

Q: Q6. A debt of $ 5700 is due, with interest at j, = 8% in three years. It is agreed that the loan…

A: Future Value(FV) is value of current amount at future date. It is computed by compounding that…

Q: What is the value of before tax equity reversion if sales price is Tk. 8900000, selling expense is…

A: Sales price = Tk. 8900000 Selling expense = 20% of sales                           = 20% x Tk.…

Q: How much money will the bank need to loan a purchaser using a 20% down payment on a $180,000…

A: Loan provided must be equal to the purchase price minus the down payment on the purchase.

Q: Bank A $235,000 20-year fixed 4.375% Bank B $235,000 20-year fixed 4.7% 1.75 discount points 0…

A: Given: Bank A: Loan amount=$2,35,000,period=20 years,interest rate=4.375%,discount…

Q: Q1. If you decide to deposit $5000 in each year for 10 years and bank offer 10% annual compound…

A: Present value is the current value of the amounts that can be made in future. If same cash flows…

Q: Match the correct answer for the following questions v The present worth of $400 in year 1 and…

A: 1) First year amount (A1) = $400 Increase of $30 every year till year 5 r = 12%

Q: Suppose you borrowed $35,000 at a rate of 8.1% and must repay it in 4 equal installments at the end…

A: Loan amount (LV) = $35000 Interest rate (i) = 8.1% Number of annual payments (n) = 4

Q: At an interest rate of 10% compounded annually, Find P? $75,000 G = $1,500 $9,000 $5,400 $6,500 0 1…

A: Given Information: Cash flows for year 1 is $5400, for year 2 is $6500 and for 3 is $9000. After…

Q: st borrowed $267,000 at 2.125%for 15-years.My lender is looking to sell my loan and the market rate…

A: The loans are paid by the monthly regular payments that carry the payment for principal amount and…

Q: 1  Borrow $178,000 at 5.25% for 30 years 2  Borrow $178,000 at 4.00% for 15 years What are the 2…

A: Calculation of Payments and Total Interest Paid for 2 Mortgages:Assuming both the mortgages is paid…

Q: Calculate the annual change in interest expense that would occur for a drop in interest rates from…

A: To calculate the annual change in interest expense for a drop in interest rates, you can use the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.