Mr. Friedman owns a house, which he purchased five years ago. He had financed the purchased with $450,000 mortgage with an interest rate of 9%, a 30 year term, and a 1.5% origination fee. Today, a new mortgage can be obtained at 6% for 25 years with a 1% origination fee and 2.5 discount points. If Mr. Friedman pays off the existing loan within 8 years of origination, a 3% prepayment penalty will be charged on the outstanding loan balance. He intends to sell the house five years from now. To finance the initial investment required to refinance the house Mr. Friedman can obtain a personal loan at 9% for 60 months, or he can use his own capital a) Should he refinance if his opportunity cost of capital is 8% (in other words, if he didn’t use his money for refinancing, he could invest it at 8%)? Assume that the new loan amount would be equal to the outstanding balance of the loan.
b) Ignoring taxes, which source of funds should Mr. Friedman use if he decides to refinance the house? Explain.

Balance sheet the assets of dallas & associates consist entirely of current assets and net plant and equipment. the firm has total assets of $2 5 million and net plant and equipment equals $2 million. it has notes payable of $150,000, long-term debt of $750,000, and total common equity of $1 5 million. the firm does have accounts payable and accruals on its balance sheet. the firm only finances with debt and common equity, so it has no preferred stock on its balance sheet. a. what is the company's total debt? b. what is the amount of total liabilities and equity that appears on the firm's balance sheet? c. what is the balance of current assets on the firm's balance sheet? d. what is the balance of current liabilities on the firm's balance sheet? e. what is the amount of accounts payable and accruals on its balance sheet? [hint: consider this as a single line item on the firm's balance sheet.] f. what is the firm's net working capital? g. what is the firm's net operating working capital? h. what is the explanation for the difference in your answers to parts f and g?

Starting at age 30, you deposit $2000 a year into an ira account for retirement. treat the yearly deposits into the account as a continuous income stream. if money in the account earns 7%, compounded continuously, how much will be in the account 35 years later, when you retire at age 65? how much of the final amount is interest?

The uptowner just paid an annual dividend of $4.12. the company has a policy of increasing the dividend by 2.5 percent annually. you would like to purchase shares of stock in this firm but realize that you will not have the funds to do so for another four years. if you require a rate of return of 16.7 percent, how much will you be willing to pay per share when you can afford to make this investment?