1) You buy a car, and take out a loan for $14,000 that has equal nominal annual payments over the next five years. The real rate of return on the loan is 4.3%, and the annual inflation rate is 2.6%. What will the payments be?
2) You have $2500 in an account that yields a nominal return of 7%. If the inflation rate is 3%, how long will you have to leave your money in the account for it to double in real terms?
46. The Hooya Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .51 and a current ratio of 1.40. Current liabilities are $2,460, sales are $10,660, profit margin is 12 percent, and ROE is 17 percent. Required: What is the amount of the firm’s net fixed assets?