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.

Companies in the u.s. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. in 2011 hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. the following data show the number of cars in service (1000s) and the annual revenue ($ millions) for six smaller car rental companies (auto rental news website, august 7, 2012). excel file: data14-09.xls if required, enter negative values as negative numbers. a. select a scatter diagram with the number of cars in service as the independent variable. b. what does the scatter diagram developed in part (a) indicate about the relationship between the two variables? c. use the least squares method to develop the estimated regression equation (to 3 decimals). ŷ = + x d. for every additional car placed in service, estimate how much annual revenue will change. by $ e. fox rent a car has 11,000 cars in service. use the estimated regression equation developed in part (c) to predict annual revenue for fox rent a car. round your answer to nearest whole value. $ million hide feedback partially correct

There is a small, family-owned store that sells food and household goods in a small town. the owners have good relations with the community, especially with local farmers who supply much of the food. the farmers aren't organized into a cooperative or union, and the store deals with each individually. suppose the store wanted to buy some farms to control the supply of certain vegetables. how would you classify this strategic move? select one: a. horizontal integration b. forward integration c. backward integration d. concentric integration

Sauer food company has decided to buy a new computer system with an expected life of three years. the cost is $440,000. the company can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. assume interest is paid in full at the end of each year. a. how much would sauer food company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 12 percent rate? compare this to the 14 percent three-year loan.