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Which of the following statements is false? 0 A. The highest interest rate for a given horizon is the rate paid on Treasury Bills of the Government of Canada. B. The equivalent after-tax interest rate is r(1-t). C. It is important to use a discount rate that matches both the horzon and the risk of the cash flows. O D. The actual return kept by an investor will depend on how the interest is taxed.
Problem 5-16 Question Help You have just purchased a home and taken out a $490,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR (with semi-annual compounding) of 5.36%. (Note: Be careful not to round any intermediate steps less than six decimal places.) a. How much will you pay in interest, and how much will you pay in prinoipal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the twentieth year (i.e., between 19 and 20 years from now)? a. How much will you pay in interest, and how much will you pay in principal, during the first year? During the first year you will pay Interest payment (Round to the nearest dollar) Principal payment S Round to the nearest dollar.)

Problem 5-23 Question Help The mortgage on your house in Winnipeg is 5 years old. It required monthly payments of $1,390, had an original term of 30 years, and had interest rate of 10% APR win semi annual compounding Inthe intervening 5years terest rates have falle housing p ces in the United States have fallen, and you have decided to retire to Florida. You have decided to sell your house in Winnipeg and use your equity for the down payment on a condo in Florida. You will oll over the outstanding balance of your old mortgage into a new mortgage in Florida. The new mortgage has a 30-year term requires monthly payments, and has an interest rate of 6.125% APR with monthly compounding which is typical for U.S. mortgages). (Note: Be careful not to round any intermediate steps less than six decimal places.) a. What monthly repayments will be required with the new loan? b. If you still want to pay off the mortgage in 25 years, what monthly payment should you make on your new mortgage? c. Suppose you are willing to continue making monthly payments of $1,390. How long will it take you to pay off the new mortgage? d. Suppose you are willing to continue making monthly payments of $1,390 and want to pay off the mortgage in 25 years. How much additional cash can you borrow today as part of the new financing? (Note: Be careful not to round any intermediate steps less than six decimal places.) a. What monthly repayments will be required with the new loan? The monthly repayments with the new loan will be s(Round to two decimal places.)
5.4-1 Questio Which of the following statements is false? O A The actual cash fow that the investor will get to keep will be reduced by the amount of any tax payments OB. To compensate for the risk that they will receive less I he firm defaults, investors demand a lower interest rate than the rate on Treasury Bills of the O C. The right discount rate for a cash fow is 0 D. The equivalent after-tax interest rate is(1-t). Government of Canada. the rate of return available in the market on other investments of comparable risk and term.
Problem 4-44 Question Help de Coaticook in the Easternm Townships of Quebec produces several types of cheddar cheese. It markets this cheese in four varieties: aged 2 months, 9 months, 15 months, and 2 years. At the producers store, 2 kg of each variety sell for the following prices: $7.00 $9.50, $11.00, and $12.00, respectively. Consider the cheese makers decision whether to continue to age a particular 2-pound block of cheese. At 2 months, he can either sell the cheese immediately or let it age further. If he sells it now, he will receive $7.00 immediately. If he ages the cheese, he must give up the $7.00 today to receive a higher amount in the future. What is the IRR (expressed in percent per month) of the investment of giving up $70.00 today by choosing to store 20 kg of cheese that is currently 2 months old and instead selling 10 kg of this cheese when it has aged 9 months, 6 kg when it has aged 15 months, and the remaining 4 kg when it has aged 2 years? The IRR is □% per month. (Enter your response as a percent rounded to two decimal places.)
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