Author Question: If you buy a factory for 250,000 and the terms are 20 down, the balance to be paid off over 30 years ... (Read 45 times)

kaid0807 · **on:** Jul 10, 2018

If you buy a factory for 250,000 and the terms are 20 down, the balance to be paid off over 30 years at a 12 percent rate of interest on the unpaid balance, what are the 30 equal annual payments? (Round to the nearest whole dollar)

A) 20,593
B) 31,036
C) 24,829
D) 50,212
E) 6,667

Question 2

Which of the following would be considered the firm's optimal capital structure?

A) Stock Price = 23, Earnings Per Share = 11, Cost of Equity Capital = 18
B) Stock Price = 24, Earnings Per Share = 12, Cost of Equity Capital = 17
C) Stock Price = 25, Earnings Per Share = 10, Cost of Equity Capital = 15
D) Stock Price = 20, Earnings Per Share = 12, Cost of Equity Capital = 20