Ask Question
BusinessBusiness
17 August, 14:47

Present value with periodic rates. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost $25 comma 000. The purchase will be financed with an interest rate of 7.5 % loan over 7 years. What will Sam have to pay for this equipment if the loan calls for quarterly payments (4 per year) and monthly payments (12 per year) ? Compare the annual cash outflows of the two payments. Why does the monthly payment plan have less total cash outflow each year?

+1
Answers (1)
  1. 17 August, 14:52
    0
    Why does the monthly payment plan have less total cash outflow each year?

    Total paym. capital Interest

    Q. Totales payments 32.362,50 25.000,00 7.362,50

    AnnulaTotales payments 33.040,06 25.000,00 8.040,06

    Compare the annual cash outflows of the two payments.

    Total paym. capital Interest

    Year 1 Quarterly 4.623,21 2.826,48 1.796,74

    Year 1 Annual 4.720,01 2.845,01 1.875,00

    Year 2 Quarterly 4.623,21 3.044,50 1.578,71

    Year 2 Annual 4.720,01 3.058,38 1.661,62

    Year 3 Quarterly 4.623,21 3.279,34 1.343,87

    Year 3 Annual 4.720,01 3.287,76 1.432,25

    Year 4 Quarterly 4.623,21 3.532,30 1.090,92

    Year 4 Annual 4.720,01 3.534,34 1.185,66

    Year 5 Quarterly 4.623,21 3.804,76 818,45

    Year 5 Annual 4.720,01 3.799,42 920,59

    Year 6 Quarterly 4.623,21 4.098,25 524,97

    Year 6 Annual 4.720,01 4.084,38 635,63

    Year 7 Quarterly 4.623,21 4.414,37 208,85

    Year 7 Annual 4.720,01 4.390,71 329,30

    Explanation:

    Period Payment Capital Interest

    1 1.155,80 687,05 468,75

    2 1.155,80 699,94 455,87

    3 1.155,80 713,06 442,74

    4 1.155,80 726,43 429,37

    5 1.155,80 740,05 415,75

    6 1.155,80 753,93 401,88

    7 1.155,80 768,06 387,74

    8 1.155,80 782,46 373,34

    9 1.155,80 797,13 358,67

    10 1.155,80 812,08 343,72

    11 1.155,80 827,31 328,50

    12 1.155,80 842,82 312,98

    13 1.155,80 858,62 297,18

    14 1.155,80 874,72 281,08

    15 1.155,80 891,12 264,68

    16 1.155,80 907,83 247,97

    17 1.155,80 924,85 230,95

    18 1.155,80 942,19 213,61

    19 1.155,80 959,86 195,94

    20 1.155,80 977,86 177,95

    21 1.155,80 996,19 159,61

    22 1.155,80 1.014,87 140,93

    23 1.155,80 1.033,90 121,90

    24 1.155,80 1.053,29 102,52

    25 1.155,80 1.073,03 82,77

    26 1.155,80 1.093,15 62,65

    27 1.155,80 1.113,65 42,15

    28 1.155,80 1.134,53 21,27

    Totales payments 32.362,50 25.000,00 7.362,50

    Period Payment Capital Interest

    1 4.720,01 2.845,01 1.875,00

    2 4.720,01 3.058,38 1.661,62

    3 4.720,01 3.287,76 1.432,25

    4 4.720,01 3.534,34 1.185,66

    5 4.720,01 3.799,42 920,59

    6 4.720,01 4.084,38 635,63

    7 4.720,01 4.390,71 329,30

    Totales payments 33.040,06 25.000,00 8.040,06
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Present value with periodic rates. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Marc and Michelle are married and earned salaries this year of $72,400 and $15,150, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,550 from corporate bonds.
Answers (1)
A company has preferred stock with a current market price of $18 per share. The preferred stock pays an annual dividend of 4% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.50 per share.
Answers (1)
Last year, DJ's Soda Fountains, Inc. reported an ROE = 27 percent. The firm's debt ratio was 50 percent, sales were $9 million, and the capital intensity ratio was 1.5 times. What is the net income for DJ's last year? Multiple Choice a. $1.22m b. $1.
Answers (1)
The chart of accounts for the Miguel Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense
Answers (1)
Limited liability companies are primarily designed to:allow a portion of its owners to enjoy limited liability while granting the other portion of its owners control over the entity.
Answers (1)
New Questions in Business
Transfer payments are not included in gdp calculation because these are
Answers (1)
In which year were tobacco commercials banned from network television in the united states?
No Answers
Maggie's manager notices that she exhibits an external locus of control when she speaks about her work. Her manager should Group of answer choices a. direct Maggie toward a job with more autonomy. b.
Answers (1)
Consider this argument: "The kidnappers have taken eight people hostage and are holding them at a farmhouse just outside town. If the SWAT team assaults the farmhouse, the hostages could be killed.
Answers (1)
Rent seeking is an attempt to A. use the government for individual benefit at the expense of others. Regulatory capture is an example of this, where a regulatory agency makes decisions benefiting the firm being regulated. B.
Answers (1)
Home » Business » Present value with periodic rates. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost $25 comma 000.
Sign Up Forgot Password?