Business, 12.03.2021 15:30, fabiolafrancklin10
Ms. Smith owns a house, which she purchased five years ago. The original mortgage was for $150,000 with an interest rate of 8% and a term of 25 years. She also paid 2 points. Interest rates have now fallen to 6% and a new mortgage can be obtained for an origination fee of 1% of the new loan amount. The term is 20 years. If the existing loan is paid off within 10 years of origination, a prepayment penalty equal to 1.5% of the outstanding balance will be charged.
a) Should Ms. Smith refinance her mortgage if she plans to sell the house 5 years from now and her required rate of return is 8%? Assume that the new loan amount would be equal to the outstanding balance of the loan.
b) Approximately how long must Ms. Smith hold the new mortgage for in order to recover her initial investment?
Answers: 3
Business, 22.06.2019 06:40, SkyMelvin
10. which of the following is true regarding preretirement inflation? a. defined-benefit plans provide more inflation protection than defined-contribution plans. b. because of preretirement inflation, possible investment-related growth is increased for defined-contribution plans. c. all types of benefits are designed to cope with preretirement inflation. d. preretirement inflation is generally reflected in the increase in an employee's compensation level over a working career.
Answers: 3
Business, 22.06.2019 11:00, mmcdaniels46867
Companies hd and ld are both profitable, and they have the same total assets (ta), total invested capital, sales (s), return on assets (roa), and profit margin (pm). both firms finance using only debt and common equity. however, company hd has the higher total debt to total capital ratio. which of the following statements is correct? a) company hd has a higher assets turnover than company ld. b) company hd has a higher return on equity than company ld. c) none of the other statements are correct because the information provided on the question is not enough. d) company hd has lower total assets turnover than company ld. e) company hd has a lower operating income (ebit) than company ld
Answers: 2
Ms. Smith owns a house, which she purchased five years ago. The original mortgage was for $150,000 w...
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