The individual in question retired early and has considerable invested assets, but would prefer to keep those assets invested and get a mortgage rather than pay cash for the house. The credit rating is excellent and there is no debt. There is no income per se because all assets are invested and the individual is not yet old enough to collect Social Security or a pension. Are mortgages ever approved in this situation? If so, are there any special types of mortgage brokers or companies that do this? And are there any special terms, e.g., placing some of the assets in an annuity, that mortgage companies require? Thank you.
Thanks for the answers so far, and to respond to Jano’s question, the individual lives comfortably by drawing down on invested assets.

Newman Labs is considering buying equipment which would enable the company to obtain a five-year research contract. The specialized equipment costs 0,000 and will have no salvage value when the five-year contract period is over. The estimated annual operating results of the project are as follows:

Revenue / 0,000
Expenses (including straight-line depreciation) / (650,000)
Increase in net income / 0,000

All revenue from the contract and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes.

Refer to the information above. Compute the net present value of this investment, using a discount rate of 12%. (An annuity table shows that the present value of received annually for five years, discounted at 12%, is 3.605.)

A. 8,650.
B. 9,150.
C. 9,500.
D. 9,150.

Hi, I am so confused on how to set this up. There is so much information and I am not sure what to ignore. The problem states the specialized equipment costs of 0,000 will have no value and I think this is the same as the 650,000 in parenthesis that is in the table so I think I ignore that. But I think parenthesis means credit so I am not sure if I add this amount.

I have tried many different calculations using the numbers in the table and multiplying them by 12% but I am not close to any of the options. Can anyone help or explain more? Thank you so much )

A machine cost ,000 and had a useful life of 4 years and a residual value of ,000. What is the net present value of the machine if the annual cash flow is ,000 and the company uses a discount rate of 10%? An annuity table shows the present value of at 10% for 4 years to be 0.683. The present value of an ordinary annuity of discounted at 10% for 4 years is 3.170.

A. ,501
B. ,118
C. ,501
D. ,000

There are so many values in this question and I am not sure what to use and what to ignore. Can anyone help or explain more? Thank you so much

Got some questions on an Econ study guide that i have NOOO IDEA about:

1. The portion of a firm’s assets financed with long term funds may be called…?

2. How is risk measured in working capital management?

3. What is the primary EMPHASIS of the financial manager?

4. ____ is the term used to describe the magnification of risk and return introduced through the use of fixed cost financing such as preferred stock and long-term debt.

5. What can cash disbursement NOT include?

6. ____ leverage is concerned with the relationship between sales revenue and earnings per share.

7. ____ analysis is a technique used to assess the returns associated with various cost structures and levels of sales

8. Higher financial leverage causes ____ to increase more for a given increase in ___?

9. Through the effects of financial leverage, when EBIT increases, earnings per share will…?

10. A dividend reinvestment plan ____ on the security?

11. The firm’s accounting requirements can be separated into..?

12. A philanthropist makes a donation to provide faculty with $xxx per year into perpetuity. The rate of interest is %xxx for all future time periods – how large must the endowment be?

Also, how do you calculate the future/present value of an annuity?

How do you calculate the cost of preferred stock, given $ per share par value, $ annual dividend, and $ cost of issuance?

Thank you so much – I am so lost.