Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
A dental clinic is earning a net monthly income of P35 000 with fixed expenses of P20 000
A dental clinic is earning a net monthly income of P35 000 with fixed expenses of P20 000. The clinic acquired a new machine worth P270 000 and plans to pay 25% advance payment and the balance by quarterly amortization for 5 years. If money is worth 5% compounded quarterly, find the following: Quarterly amortization 11 506.13 b. 11 989.45 c. 33 489.61 d. 42031.33 Disposable income per quarter Net income per quarter a. 3493.87 b. 23 493.87 c.31 164.62 d. 33 493.87 Expense-to-income ratio
Expert Solution
Value of New machine = P270000
Down payment = 25%*P270000 = P 67500
Mortgage amount = P270000 - P 67500 =P202500
interest rate per quarter = 5%/4 = 1.25% or 0.0125
No of quarters = 5 years *4 quarters/year = 20
So, Quarterly mortgage payment (A) is given by
A/0.0125*(1-1/1.0125^20) = 202500
A = P11506.13
Quarterly amortization amount is P11506.13 (option a)
Disposable Income per month = P 35000 - P 20000 = P15000
So, Disposable income per quarter before mortgage payment = P15000*3 =P45000
Disposable income per quarter after mortgage payment = P45000 - P11506.13 =P33493.87 (option d)
Expense to Income Ratio = (20000*3+11506.13)/(35000*3) = 68.10%
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
