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Homework answers / question archive / 1)You want to by a boat now, and can afford payments of $360 per month for five years

1)You want to by a boat now, and can afford payments of $360 per month for five years

Finance

1)You want to by a boat now, and can afford payments of $360 per month for five years. The monthly interest rate is 0.5%, (compounded monthly). (a) What is the maximum you can spend on the boat if there is no down payment? (b) What is the maximum you can spend on the boat if you also have $5000 for a down payment of at the time of purchase?

2)EN While an exporter usually wants to collect the payments early, an importer prefers to make the payment as late as possible. What is the reason behind it? What determine which payment method to be used?

3)

Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on the debt is 6 percent, and there are no taxes.

  

a.

If EBIT is $275,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b. If EBIT is $525,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c. What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

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