FIN 502 Study Guide - Final Guide: Second Mortgage, Effective Interest Rate, Tax Rate

• School: Ryerson University
• Department: Finance
• Course: FIN 502
• Professor: Coleen Clark

Document Summary

Acceptable standards ratio: tds 40%, gds 30% Gds ratio (only housing costs) = [(mort. pmts)(# of periods)+tax] /gross income. Tds ratio (all other debts including (ex. car loans)) = [(mort. pmts)(# of periods)+tax+(other debt pmts)]/gross income. Total debt ratio:(totat assets total equity) / total assets. Debt/equity ratio = total debt/total equity equity multiplier = total assets/total equity. Long term debt ratio = long term debt / (long term debt + total equity) Times interest earned =ebit/interest cash coverage ratio = (ebit + dep)/interest. According to tds ratio: net income x tds ratio = 250,000 x 0. 4 = ,000 according to. At 10% for tds loan: ,000/0. 1 = 1,000,000. 2. a)goal setting: jones want to have mil, when he retires in 25 years. Tvm: n=25, i%=0,pv=0,pmt=-3000,fv=1000000, exe(i%)=17. 8% b)investment loan: he wants to invest his annual saving of in a mutual fund.