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Is fixed interest rate better than variable interest rate for banks?
Yes, because a variable interest rate can go up as high as 9% APR when you can get a fixed APR of 3.5%. Also with variable interest your payments will always jump around and with fixed your payments are what you sign.
What are the differences between fixed and variable interest rates on loans?
Fixed interest rates on loans remain the same throughout the loan term, providing predictability in monthly payments. Variable interest rates can change based on market conditions, leading to fluctuating payments.
What are the differences between fixed and variable APR, and how do they impact the overall cost of borrowing?
The main difference between fixed and variable APR is that fixed APR stays the same throughout the loan term, while variable APR can change based on market conditions. Fixed APR provides more predictability in monthly payments, while variable APR can lead to fluctuating payments. The impact on the overall cost of borrowing is that fixed APR offers stability and easier budgeting, while variable APR can result in lower initial rates but potentially higher costs over time if rates increase.
What cost category are Mortgage payments classified under?
Mortgage payments are typically classified under fixed costs or fixed expenses. This category includes regular, predictable payments that do not fluctuate significantly over time, such as principal and interest payments on the loan. Additionally, mortgage payments may also include property taxes and homeowners insurance, which can be considered variable costs if they change annually.
Will My Payments Increase In Between The Term Of The Lease?
No. Your payments are locked in for the complete term of the lease. However, in case the tax rates increase, then on that way it will affect your payments.
Is a lease payment for cash register a variable cost?
A lease payment for a cash register is typically considered a fixed cost rather than a variable cost. Fixed costs remain constant regardless of the level of business activity, while variable costs fluctuate with production or sales volume. Since lease payments are usually agreed upon for a specific term and do not change with sales volume, they fall into the fixed cost category.
How do you calculate lease liability?
To calculate lease liability, first identify the total lease payments over the lease term, including fixed payments, variable payments that depend on an index, and any residual value guarantees. Then, determine the discount rate, which is typically the interest rate implicit in the lease or the lessee's incremental borrowing rate if the implicit rate is not readily determinable. Finally, present value these lease payments using the discount rate to arrive at the total lease liability.
Is lease payment a fixed cost?
Yes, lease payments are typically considered fixed costs because they remain constant over the lease term regardless of the level of production or sales. These payments are predetermined amounts that a business must pay regularly, making them a predictable expense in financial planning. However, if a lease includes variable components based on usage or other factors, those portions would not be classified as fixed costs.
How do fixed costs and variable costs apply to the airline industry?
Fixed costs: Rent of buildings, lease payments, maintenance of property, insurance, utilities. Variable costs: Fuel, salary of crew, passenger refreshments, costs related to ground handling, etc.
Is fixed interest rate better than variable interest rate for banks?
Yes, because a variable interest rate can go up as high as 9% APR when you can get a fixed APR of 3.5%. Also with variable interest your payments will always jump around and with fixed your payments are what you sign.
What are the differences between fixed and variable interest rates on loans?
Fixed interest rates on loans remain the same throughout the loan term, providing predictability in monthly payments. Variable interest rates can change based on market conditions, leading to fluctuating payments.
Can a coporation deduct a lease payment?
Yes, corporations can deduct lease payments. Property lease payments and vehicle lease payments are deductible in the year paid or accrued.
What are the differences between fixed and variable APR, and how do they impact the overall cost of borrowing?
The main difference between fixed and variable APR is that fixed APR stays the same throughout the loan term, while variable APR can change based on market conditions. Fixed APR provides more predictability in monthly payments, while variable APR can lead to fluctuating payments. The impact on the overall cost of borrowing is that fixed APR offers stability and easier budgeting, while variable APR can result in lower initial rates but potentially higher costs over time if rates increase.
What are some examples of variable rate loans and how do they differ from fixed rate loans?
Variable rate loans, such as adjustable-rate mortgages and variable-rate student loans, have interest rates that can change over time based on market conditions. This means that the monthly payments can fluctuate. In contrast, fixed rate loans, like fixed-rate mortgages and fixed-rate personal loans, have interest rates that remain the same for the entire loan term, providing predictability in monthly payments.
If a firm has both interest expense and lease payments would times interest earned be smaller than fixed charge coverage?
times interest earned be smaller than fixed charge coverage
Are executory costs included in aggregate lease payments?
No we will not incurred executorycosts in aggregate lease paymentsMinimum Lease payments : Minimum rental payments + guaranteedresidual value + penaltyfor not renewing or extending lease + bargainpurchase optionMinimum rental payments: Regular payment to lessor, exc'lexecutorycosts (ie.insurance,maintenance, tax).
What cost category are Mortgage payments classified under?
Mortgage payments are typically classified under fixed costs or fixed expenses. This category includes regular, predictable payments that do not fluctuate significantly over time, such as principal and interest payments on the loan. Additionally, mortgage payments may also include property taxes and homeowners insurance, which can be considered variable costs if they change annually.
