1. Identify which of the following statements accurately describe the effect of the purchase of machinery for cash:
A) Both net income and current assets decrease.
B) Both net income and non-current assets decrease.
C) Current assets increase and non-current assets decrease.
D) Current assets decrease and non-current assets increase.
2. Mr. Smith is purchasing a $170000 house. The down payment is 20% of the price of the house. He is given the choice of two mortgages:
(A) a 25-year mortgage at a rate of 6%. Find:
(i) The monthly payment: $ (3 decimal place)
(ii) The total amount of interest paid: $ (3 decimal place)
(B) a 15-year mortgage at a rate of 6%. Find:
(i) The monthly payment: $ (3 decimal place)
(ii) The total amount of interest paid: $ (3 decimal place)