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on the mortgage would be tax deductible for Bella, but interest payments on the loan from the motorcycle dealer could not be deducted on Bella's
on the mortgage would be tax deductible for Bella, but interest payments on the loan from the motorcycle dealer could not be deducted on Bella's federal tax return.
a Calculate the aftertax cost of borrowing from the motorcycle dealership.
b Calculate the aftertax cost of borrowing through a second mortgage on Bella's home.
c Which source of borrowing is less costly for Bella?
d Should Bella consider any other factors when deciding which loan to take out?
a The aftertax cost of borrowing from the motorcycle dealership is
Round to the nearest whole percentage.
b The aftertax cost of borrowing through a second mortgage is
Round to two decimal places.
Which source of borrowing is less costly for Bella? Select the best answer below.
A Both loans have the same rate of so Bella should not take either loan.
B Both loans have the same rate of so Bella should choose the loan she likes best.
C Bella should borrow by taking the second mortgage.
D Bella should borrow by taking the dealership loan.
Is there any other consideration that Bella ought to think about when deciding which loan to take out to pay for the motorcycle? Select the best answer below.
A Using the motorcycle dealership loan does put Bella at risk of losing her home if she is unable to make the loan payments.
B Using the motorcycle dealership loan does put Bella at risk of losing her home and motorcycle if she is unable to make the loan payments.
C Using the second home mortgage does put Bella at risk of losing her home if she is unable to make the mortgage payments.
D Using the second home mortgage does put Bella at risk of losing her motorcycle if she is unable to make the mortgage payments.
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