Question

You are considering selling your 1⁄2 of the business to your business partner who promised to...

You are considering selling your 1⁄2 of the business to your business partner who promised to pay you $200,000 every year for 10 years. You also have an option to sell your part for a cash price of $1.8M to another buyer. You would much rather sell it to your partner, so they offered to change annual payments to match this other offer. Calculate the new annual payment value if the interest rate is 5%.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The HRI company is considering selling its School of Business to Yale. The proposed deal would...
The HRI company is considering selling its School of Business to Yale. The proposed deal would require Yale to pay HRI $30,000 and $25,000 at the end of years 1 and 2, and to also make yearly payments (at the end of the year) of $15,000 in years 3 through 9. Yale would make a final payment to HRI for $10,000 at the end of year 10. If the discount rate is 12% what is the present value of the...
Suppose you are a partner in a business that sells wadgets. You have been selling wadgets...
Suppose you are a partner in a business that sells wadgets. You have been selling wadgets for $20 each and sell 1,000 wadgets. Your partner suggests that you increase your price of wadgets by just a little bit. You do some research and find that wadgets have a price elasticity of demand of 0.69. Should you agree to raise your price if the only concern you have is total revenue? Why?
Your cousin is selling you a muffin business at $60,000. The $60,000 will be paid off...
Your cousin is selling you a muffin business at $60,000. The $60,000 will be paid off in 10 equal end-of-year payments with interest at 12%. How many muffins should you sell per day to pay off the investment, assuming a price of $0.24 per muffin and 300 days of work per year?
Harte Systems inc a maker of electronic surveillance equipment is considering selling a well known hardware...
Harte Systems inc a maker of electronic surveillance equipment is considering selling a well known hardware chain the rights to market its home security system. the proposed deal calls for the hardware chain to pay Harte 28,000 and 23,000 at the end of years 1 and 2 and to make annual year end payments of 18,000 in years 3 through 9. a final payment to Harte of 15,000 would be due at the end of year 10. b. if Harte...
You and your spouse have found your dream home. The selling price is $220,000; you will...
You and your spouse have found your dream home. The selling price is $220,000; you will put $50,000 down and obtain a 30-year fixed-rate mortgage at 7.5%.   PART A- Assume that monthly payments begin in one month. What will each payment be? a. $ 901.52   b. $1,188.66   c. $1,359.74   d. $1,563.01   e. $1,722.80   PART B- How much interest will you pay (in dollars) over the lifetime of the loan? (Assume you make each of the required 360 payments on time.)  ...
Congratulations: You have won the lottery! The State of Confusion has three payment options for your...
Congratulations: You have won the lottery! The State of Confusion has three payment options for your winnings. Option 1 is a lump sum payment of $3,500,000 today; Option 2 is a lump sum payment of $5,000,000 in five years; and Option 3 is annual payments of $200,000 for the next 20 years (first payment today). Which option is the most lucrative to you in present year dollars? (Assume a 1% inflation rate and an ability to earn 4% interest on...
You have found your dream home. The selling price is $300,000. You will put $60,000 as...
You have found your dream home. The selling price is $300,000. You will put $60,000 as down payment and obtain a 30-year fixed-rate mortgage loan at 4.5 percent annual interest rate for the rest. a) You are required to make an equal payment every monthfor 360 months to pay off the balance on the loan. Assume that the first payment begins in one month after you obtained the loan. What will each monthly payment be? b) If you want to...
You want to calculate your breakeven point on the hydroponic business you are considering starting. From...
You want to calculate your breakeven point on the hydroponic business you are considering starting. From the analysis you used in your business plan, • unit cost per system of $125 and selling price of $250 • fixed costs to run the business (rent, salary, overhead, and Selling, General and Administrative costs or SG&A) of $12,000/year. How many systems to you need to sell to break even? Investors like to know these values. Why?
Imagine if you were a business owner who was considering taking your company public. You would...
Imagine if you were a business owner who was considering taking your company public. You would be faced with similar questions. As a small business owner, would you want to pay dividends? Why or why not? How would you rationalize this to the shareholders?
You took out your home mortgage five years ago, and are currently considering refinancing into a...
You took out your home mortgage five years ago, and are currently considering refinancing into a loan at a lower rate and for a shorter term. Your original loan was for 30 years, at 6% interest on the $200,000 borrowed, and you pay monthly. The new loan you are considering will be for 15 years at a rate of 4%. Again, the payments will be monthly. What will your new payment be if you take on this new loan? SHOW...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT