Answer:
C
Explanation:
Since it is a deal on luxury cars, it is expected that the amount of money that will be allocated to start it by Tiyona motors would be high. Also, before Tiyona motors decided it would be running this kind of investment, there had been other players in the game. As a green horn in the luxury car business, it is expected that there would be a huge competition from pre-existing companies who have been in the game before Tiyona motors.
The above explanation is the reason why option C is the correct answer
Answer:
Annual payment $5,833,333.3
Explanation:
he sooner the amount is received, the higher is the present value
Hence, annuity with greatest present value is:
An annuity that pays $1,000 at the beginning of each year
Value of annuity = Annual payment*Present value annuity factor
11,417.87 = Annual payment*PVAF(9.5%, 6 years)
11,417.87 = Annual Payment*4.4198
Annual payment = $2,583.35
Annual payment = 35,000,000/6 = $5,833,333.33
Answer:
you owe $43.47 in one month
Explanation:
Daily Interest (for one month) = Balance × APR rate × [number of month / Total month in a year]
Daily Interest = $1800 × 28.99% × 1/12
= $1800 × 0.2899 × 0.0833
= $43.47
Answer:
Please see below
Explanation:
Given that;
Common stock outstanding = 11,300
Price per share = $65
Number of bonds outstanding = 340
Bonds sell for $94.2 percent of par
Par value per bond = $1,000
Market value of common stock = Common stock outstanding × Price per share
= 11,300 × $65
= $734,500
Market value of debt:
Number of bonds outstanding × [Percent of par × Par value]
= 340 × [0.942 × $1,000]
= 340 × $942
= $320,280
Total market value:
= Market value of common stock + Market value of debt
= $734,500 + $320,280
= $1,054,780
WACC:
= [(Market value of debt ÷ Total market value) × Pretax cost of debt × (1 - Tax rate)] + [(Market value of common stock ÷ Total market value) × Rate of return]
= [($320,280 ÷ $1,054,780) × 0.00593 × (1 - 0.39)] + [($734,500 ÷ $1,054,780) × 0.1121]
= [(0.303646258) × 0.0036173 + [0.00780612545]
= 0.0010983796 + 0.00780612545
= 0.008904505
= 0.89%
