Fill in the appropriate data inputs and calculations for each option (across the row) so that all information is listed. For all options, assume that the payment period duration will be used as the compounding period and that payments are made at the end of each period.
• Option 1—AD Executives Inc. has proposed a campaign costing $45,000. This agency will accept full payment over the next two years in equal monthly installments of $2,100. For this option, you need to calculate the annual interest rate.
• Option 2—Bradshaw & Hicks has designed a campaign for $45,000 and indicated that it will charge a 6.25% annual rate of interest on this amount, with fixed quarterly payments paid out over the next 18 months. For this option, you need to calculate periodic payments.
• Option 3—AdWest Inc. has proposed the most modestly priced campaign, costing $30,000. This agency is willing to accept monthly payments of $1,400 until the Evaluating the Financial Impact of Loans and Investments Chapter 6 383 6Level 1 campaign is completely paid off. AdWest Inc. will charge a 6.5% annual interest rate. For this option, you need to calculate the duration in years that will be required to pay off this debt.
• Option 4—Johnson, Bellview & Associates has shown the Marketing team an excellent campaign that will cost $1,500 a month for the next two years. This agency’s payment terms are based on an annual interest rate of 5%. For this option, you need to calculate the initial value of this advertising campaign.
4. In an adjacent column, calculate the total yearly payments required for each option.
Solved by G. F. in 19 mins