Holt Holdings, Inc., is considering replacing their existing operating system with a new one. The new system will save the company $70,000 per year for the next 8 years. Using a discount rate of 8%, what is the most the company should be willing to pay for the new system?

Multiple Choice

$434,685.57

$692,822.75

$140,000.00

$560,000.00

$386,427.59

You are buying a house priced at $250,000. You need to make a 10% down payment, and closing costs will be 4%. Which of the following is/are true?

I. The amount of the loan will be $250,000

II. The required down payment is $25,000

III. Closing costs will be $10,000

IV. You will need to bring a total of $34,000 to the bank in order to get the loan

Multiple Choice

Only II and IV are True

Only III and IV are True

Only II is True

All of them are True

Only II and III are True

Which of the following is/are NOT an advantage of a company issuing stocks rather than bonds?

I. The company has no obligation to make regular payments to stockholders

II. Bondholders usually require a higher return than stockholders

III. Issuing stock does not increase the risk of bankruptcy for the firm

IV. Dividends are tax-deductable, unlike bond coupon payments

Only II and IV

Only I, II, and IV

Only II, III, and IV

All of them

Only II