Financial Management Problems solved, Business & Finance Assignment Homework Help
Subject
Business Finance
Question Description
Chapter 4 Problems 4 – 8, 4 – 13, & 4 – 21
4 – 8
You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 5 years (60 months), and the nominal interest rate would be 12%, with interest paid monthly. What is the monthly loan payment? What is the loan’s EFF%?
4 – 13
Find the present value of the following ordinary annuities.
$400 per year for 10 years at 10%
$200 per year for 5 years at 5%
$400 per year for 5 years at 0%
Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.
4 – 21
Sales for Hanebury Corporation’s just-ended year were $12 million. Sales were $6 million 5 years earlier.
At what rate did sales grow?
Suppose someone calculated the sales growth for Hanebury in part a as follows: “Sales doubled in 5 years. This represents a growth of 100% in 5 years; dividing 100% by 5 results in an estimated growth rate of 20% per year.” Explain what is wrong with this calculation.