You have decided to buy a very expensive sofa from Craft & Barrels but you don't...
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You have decided to buy a very expensive sofa from Craft & Barrels but you don't have enough cash today. You arrange financing by agreeing to pay $750 today and signing a contract that says you will borrow the remaining $9,000 over 36 months with payments based on a 6.80% rate. The sofa has a competitive value of $9,400, while you have a competitive market rate of interest of 5.50%. Calculate the creation/destruction of value that you experienced in this transaction? (Round your answer to dollars and cents; do not round interim calculations.) Multiple Choice O O Created Value in the amount of $224.20 Destroyed Value in the amount $175.80 Destroyed Value in the amount of $525.80 Created Value in the amount of $925.20 You have decided to buy a very expensive sofa from Craft & Barrels but you don't have enough cash today. You arrange financing by agreeing to pay $750 today and signing a contract that says you will borrow the remaining $9,000 over 36 months with payments based on a 6.80% rate. The sofa has a competitive value of $9,400, while you have a competitive market rate of interest of 5.50%. Calculate the creation/destruction of value that you experienced in this transaction? (Round your answer to dollars and cents; do not round interim calculations.) Multiple Choice O O Created Value in the amount of $224.20 Destroyed Value in the amount $175.80 Destroyed Value in the amount of $525.80 Created Value in the amount of $925.20
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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