You plan to purchase a house for $239,000 using a 15-year mortgage obtained from your local bank. You will make a down payment of '10 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. a. Your bank offers you the following two options for payment. Which option should you choose? b. Your bank offers you the following two options for payments. Which option should you choose? 8. Which option should you choose? b. Which option should you choose? Note: There are no closing costs other than points paid. Chapter . 12 Problem . Start with the partial model in the file Ch 1 2 PYT Build a Medal List on the textbook's Web site , which contains Henley Corporation's most recent financial statements . Use the following ratios and other selected information for the current and projected years to answer the next questions . Income Statement for the Year Ending December 31 ( Millions of Dollars! 2010 Not Sales Costs ( except depreciation !* Depreciation 60. 0 Total operating costs 6:36. 0 Earning before int . & tax $ 16:40 Loss interest 32.0 Earning before taxes 132.0 Taxes (40%/6 ) 52. 8 Not income before prof . div . 79. 2 Preferred div . Net income avail . for com . div . TT. ` Common dividends 31 . 1 Addition to retained earnings 46. 7 Number of shares ( in millions ) 10 Dividends per share $ 3.11 Balance Sheets for December 31 ( Millions of Dollars ! Assets 2016 Liabilities and Equity 2016 Cash 5. &. D Accounts Payable 5 16. 0 Short - term investments 20.0 Notes payable 40. 0 Accounts receivable Accruals 40. 0 5 Inventories 160. 0 Total current liabilities 96. 0 Total current assets 26.6. 0 Long-term bonds 3:00. 0 Not plant and equipment 6.00. 0 Preferred stock 15. 0 Total Assets | Far plus FILI 5 257. 0 Retained earnings 200.0 Common Equity 457 . 0 Total liabilities and equity*Projected ratios and selected information for the current and projected years are shown below . Inputs Actual Projected Projected Projected Projected 12/31/10 12/31/17 12131/18 12/31/14 12/31/20 Sales Growth Rate 10% Costs / Sales 729/0 72% 72%/0 72%/6 Depreciation" Not PPE] 10% 10%/} Cash / Sales 196 |Acct . Rec.\\/Sales 10% 10%/6 10% Inventories / Sales 20% 20% 20%/} 20% 20% |Not PPE\\/Sales | Acct . Pay.\\/Sales Accruals / Sales THE rate Weighted average cost of capital ( WALL ! 10. 5%/} 10. 5%/6 10. 5%/6) 10. 5%/} 10. 5%/6)
