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.

Areal estate agent is considering changing her cell phone plan. there are three plans to choose from, all of which involve a monthly service charge of $20. plan a has a cost of $.42 a minute for daytime calls and $.17 a minute for evening calls. plan b has a charge of $.52 a minute for daytime calls and $.15 a minute for evening calls. plan c has a flat rate of $80 with 275 minutes of calls allowed per month and a charge of $.38 per minute beyond that, day or evening.a. determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of evening calls in a month. (do not round intermediate calculations. round your answer to 2 decimal places. omit the "$" sign in your response.)c. if the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? (round each answer to the nearest whole number.include the indifference point itself in each answer.)d. suppose that the agent expects both daytime and evening calls. at what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans a and b?

Pear co.’s income statement for the year ended december 31, as prepared by pear’s controller, reported income before taxes of $125,000. the auditor questioned the following amounts that had been included in income before taxes: equity in earnings of cinn co. $ 40,000 dividends received from cinn 8,000 adjustments to profits of prior years for arithmetical errors in depreciation (35,000) pear owns 40% of cinn’s common stock, and no acquisition differentials are relevant. pear’s december 31 income statement should report income before taxes of

The following information is from the 2019 records of albert book shop: accounts receivable, december 31, 2019 $ 42 comma 000 (debit) allowance for bad debts, december 31, 2019 prior to adjustment 2 comma 000 (debit) net credit sales for 2019 179 comma 000 accounts written off as uncollectible during 2017 15 comma 000 cash sales during 2019 28 comma 500 bad debts expense is estimated by the method. management estimates that $ 5 comma 300 of accounts receivable will be uncollectible. calculate the amount of bad debts expense for 2019.