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In: Finance
Wesley Excavations has taken on a loan to buy a new bulldozer. The terms of the...
Wesley Excavations has taken on a loan to buy a new bulldozer. The terms of the loan state that they must pay $53,209 per year for the next 20 years. If Wesley's cost of debt is 0.103, how much does the bulldozer cost? You may ignore taxes.
Solutions
Expert Solution
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=53,209[1-(1.103)^-20]/0.103
=53,209*8.3421029
=$443874.95(Approx)
jeff jeffy answered 2 years agoRelated Solutions
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