Question

Answer all please

1.A medical clinic is worth 96,266 dollars. It is expected to produce equal monthly cash flows of 9,716 dollars for 8 months with the first monthly cash flow expected in 1 month. The medical clinic is also expected to make an extra cash flow of 25,331 dollars in 8 months. What is the monthly cost of capital for the medical clinic? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

2.

Bryna wants to buy a car that is available at two dealerships. The price of the car is the same at both dealerships. Best Buggies would let her make quarterly payments of $2,240 for 5 years at a quarterly interest rate of 3.72 percent. Her first payment to Best Buggies would be due in 3 months. If California Cars would let her make equal monthly payments of $935 for 4 years and if her first payment to California Cars would be today, then what is the monthly interest rate that Bryna would be charged by California Cars? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

3.

Mary Jo wants to buy a boat that is available at two dealerships. The price of the boat is the same at both dealerships. Middlefield Motors would let her make quarterly payments of 2,046.62 dollars for 8 years at a quarterly interest rate of 2.93 percent. Her first payment to Middlefield Motors would be due immediately. If Fairfax Boats would let her make equal monthly payments of 1,990.58 for 2 years and if her first payment to Fairfax Boats would be in 1 month, then what is the monthly interest rate that Mary Jo would be charged by Fairfax Boats? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Answer 1

1)The monthly cost of capital is nothing but the IRR of the project and we use irr formuale in excel to solve this answer is 0.013

2)let us find present value of the car as per best buggies plan
use pv formuale in excel
=pv(rate,nper,pmt,fv,type)
=pv(3.72%,5*4,-2240,0,0)
=31211.25
use the above one and use rate formuale to find monthly interest rate of california cars
=rate(nper,pmt,pv,fv,type)
=rate(4*12,-935,31211,25,0,1)
=1.59%
so answer is 0.016

3)let us find present value of the boat as per midfield motors plan
use pv formuale in excel
=pv(rate,nper,pmt,fv,type)
=pv(2.93%,8*4,-2046.62,0,1)
=43362.75
use the above one and use rate formuale to find monthly interest rate of fairfax boats
=rate(nper,pmt,pv,fv,type)
=rate(2*12,-1990.58,43362.75,0,0)
=0.008