Problem:
Q.1 Robert and Rebecca Richardson have just signed a 20-year, 6% fixed rate mortgage for $450,000 to buy their house. Find out this couple's monthly mortgage payment; prepare a Joan amortization schedule for Richardson's for the first 2 months; find out how much of their payments applied to interest; and after 2 payments, how much of their principal will be reduced (You may construct a loan amortization schedule, and show your calculations).
Q.2 Using the DuPont method, evaluate the effects of the following relationships for the Star corporation. Star Corporation has a profit margin of 6 percent and its return on assets percent. What is its assets turnover ratio? If star Corporation has a debt-total -assets ratio of 60 percent, what would the firm's return on equity be?
Q.3 XYZ Chocolate Company has $580,000 of 4% bonds outstanding along with20,000 shares of preferred stocks which pays 1.4% annual divided; and 50,000 shares of common stock. Assuming the firm has a 40% combined federal and state tax rates, compute the earning are (EPS) for an EBIT of $723,200.