# Question 1. (40%) You would like to take out a \$250,000 loan to start a business. The bank is offering…

Question 1. (40%) You would like to take out a \$250,000 loan to start a business. The bank is offering you a 5 year loan at 5.5% annual interest with quarterly payments. Note: The interest rates given here and in part 3 are annual values. Use the APR convention for rate conversion.

1.     Create a spreadsheet model with time line to calculate your payment and interest paid in each quarter.

2.     Create spreadsheet models similar to the above model to explore the effect of loan amortization periods of 4, 5, and 6 years on the payment and interest paid in each quarter.

3.     Cash flow will be tight when your business first gets started. Create a spreadsheet model and use Goal Seek with a 6% loan with quarterly payments to find out the number of quarters you should get for the loan to keep the payment no more than \$10,000 (set up your goal as \$5,000, \$8,000 and \$10,000). Round the quarter number up to the closest integer. What will be the quarterly payment for this loan?

Question 2. (30%) Suppose a company is about to start the following project, where all the dollar figures are in thousands of dollars. In year 0, the project requires a fixed cost of \$11,000. The fixed costs is depreciated on the straight-line basis over five years, and there is a salvage value of \$1,000 in year 5. The sales generated in years 1-5 are estimated to be 2,000 units, 3,000 units, 4,500 units, 3,500 units and 1,500 units. The costs of capital in years 1-5 are forecast to be 9.0%, 8.7%, 8.4%, 7.8% and 7.5%. The tax rate is forecast to be a constant 35.0%. Sales revenue per unit is forecast to be \$8.80. Variable cost per unit is forecast to be \$6.20. What is the project NPV? Develop your financial spreadsheet model with frozen panes for detailed calculations.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.