Bill and Ann have the following liabilities: Mortgage.............................................$43500 Car loan.................................................2750 Credit card balance..............................165 Student loans......................................15000 Furniture loan
Question:
Bill and Ann have the following liabilities:
Mortgage.............................................$43500
Car loan.................................................2750
Credit card balance..............................165
Student loans......................................15000
Furniture loan (6 months)...................1200
a. What are their current liabilities? What are their longterm liabilities? What is their net worth?
b. Bill and Ann would like to trade in one of their cars, which has a fair market value of $7000, for a new one with a fair market value of $21 500. The dealer will take their car and provide a $14 500 loan for the new car. If they make this deal, what will be the effect on their net worth?
c. What is Bill and Ann’s current ratio? What is their debt-to-asset ratio? Comment on each ratio.
DealerA dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...
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a Current liabilities Credit card balance furniture note 165 1200 1365 Long...View the full answer
