Question
Cashbox Ltd has the option of buying a new computer system with one payment today of $333000 or 5 payments of $85000 each to be
Cashbox Ltd has the option of buying a new computer system with one payment today of $333000 or 5 payments of $85000 each to be made at the end of the next 5 years with the 1 st payment to be made at the end of the 1 st year. If the required rate of return on the outlay by the company is 9% per annum, would you recommend the company pays full amount or installments. (10 marks) You have just purchased a car and taken a loan of $50000. The loan has a 5y term with monthly repayments and an interest rate of 6%. How much will you repay in interest and how much will you repay in principal during the 1 st month. (10 marks)
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