Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000...

a. What nominal interest rate is Aerotron paying on the loan?
enter percentages rounded to 4 decimal places %

b. What effective interest rate are they paying?
enter percentages rounded to 4 decimal places %

c. How much of the 14th month’s payment is interest? How much is principal?

d. How much of the 18th month’s payment is interest? How much is principal?

e. How much of the 22nd month’s payment is interest? How much is principal?

Solutions

Expert Solution

jeff jeffy answered 2 years ago

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000...

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $576.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? enter percentages rounded to 4 decimal places % b. What effective interest rate are...

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000...

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire 1st year and then to pay $566.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? b. What effective interest rate are they paying? c. How much of the 14th...

Lake Company bought a used delivery truck on January 1, 2017, for $20,000. The delivery truck...

Lake Company bought a used delivery truck on January 1, 2017, for $20,000. The delivery truck was expected to remain in service 4 years (50,000 miles). Lake's accountant estimated that the truck’s residual value would be $2,000 at the end of its useful life. The truck traveled 14,000 miles the first year and 18,000 miles the second year. Calculate depreciation expense for the truck for 2017 and 2018 using the • Straight-line method. • Double-declining balance method • Units of...

Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck. The...

Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck. The truck is expected to have a $2,000 residual value and a 6-year life. Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense? (Enter only whole dollar values.)

"A local delivery company has purchased a delivery truck for $22,000. The truck will be depreciated...

"A local delivery company has purchased a delivery truck for $22,000. The truck will be depreciated under MACRS as a five-year property. The trucks market value (salvage value) is expected to decrease by $2,000 per year. It is expected that the purchase of the truck will increase its revenue by $11,000 annually. The O&M costs are expected to be $4,800 per year. The firm is in the 40% tax bracket, and its MARR is 13.7%. If the company plans to...

"A local delivery company has purchased a delivery truck for $19,000. The truck will be depreciated...

"A local delivery company has purchased a delivery truck for $19,000. The truck will be depreciated under MACRS as a five-year property. The trucks market value (salvage value) is expected to decrease by $2,100 per year. It is expected that the purchase of the truck will increase its revenue by $11,000 annually. The O&M costs are expected to be $3,800 per year. The firm is in the 40% tax bracket, and its MARR is 15.3%. If the company plans to...

Your team asks VTEPS, Inc. to purchase a light duty delivery truck for $15,000. It is...

Your team asks VTEPS, Inc. to purchase a light duty delivery truck for $15,000. It is anticipated that the purchase of the truck will increase revenue by $10,000 annually, but have operating expenses of $3,000 per year. If your teams plans to sell the truck after two years, what is the minimum that your team can sell the truck for (i.e., MV) after 2 years in order for this to be profitable for VTEPS, Inc.?And what is the maximum that...

Big Dog Florists (BDF) just purchased a new delivery truck for $29,000, a light truck. The...

Big Dog Florists (BDF) just purchased a new delivery truck for $29,000, a light truck. The book value at the end of the year 4 is $5,011.20 a. Big Dog Florists (BDF) sold its delivery truck after three years (Prob. 1). Using a 30% tax rate, what is the after-tax salvage value for the truck if BDF sells the truck for $15,000? b. Big Dog Florists (BDF) sold its delivery truck after three years (Prob. 1). Using a 30% tax...

Two years ago, Bethesda Corporation bought a delivery truck for $30,000 (not subject to the luxury...

Two years ago, Bethesda Corporation bought a delivery truck for $30,000 (not subject to the luxury auto depreciation limits). Bethesda used MACRS 200 percent declining balance and the half-year convention to recover the cost of the truck, but it did not elect §179 expensing and opted out of bonus depreciation. Answer the questions for the following alternative scenarios. Use MACRS Table. (Do not round percentages used for calculations. Loss amounts should be indicated by a minus sign. Leave no answer...

Brock Florist Company bought a new delivery truck for $29,000. It was classified as a light-duty...

Brock Florist Company bought a new delivery truck for $29,000. It was classified as a light-duty truck. The company sold its delivery truck after three years of service. If a five-year life and MACRS, LOADING... , was used for the depreciation schedule, what is the after-tax cash flow from the sale of the truck (use a 40% taxrate) if a. the sales price was $16,000? b. the sales price was $10,000? c. the sales price was $1,000? Year 3-Year 5-Year ...

Subjects