This paper circulates around the core theme of ACCOUNTING MGT3310-XB – Bella Wans is interested in buying a new motorcycle. together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 59. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Bella Wans is interested in buying a new motorcycle. She has decided to borrow money to pay the $25,000 purchase price of the bike. She is in the 25% federal income tax bracket. She can either borrow the money at an interest rate of 5% from the motorcycle dealer, or she could take out a second mortgage on her home. That mortgage would come with an interest rate of 6%. Interest payments on the mortgage would be tax deductible for Bella, but interest payments on the loan from the motorcycle dealer could not be deducted on Bellaâs federal tax return.a. Calculate the after-tax cost of borrowing from the motorcycle dealership.b. Calculate the after-tax cost of borrowing through a second mortgage on Bellaâs home.c. Which source of borrowing is less costly for Bella?d. Is there any other consideration that Bella ought to think about when deciding which loan to take out to pay for the motorcycle?