Your supervisor has tasked you with evaluating several loans related to a new expansion project. Using the PVIFA table, determine the annual payment on a $450,000, 8% business loan from a commercial bank that is to be amortized over a five-year period. Show your work. Does this payment seem reasonable? Explain.
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Your supervisor has tasked you with evaluating several loans related to a new expansion project. Using the PVIFA table, determine the annual payment on a $450,000, 8% business loan from a commercial bank that is to be amortized over a five-year period. Show your work. Does this payment seem reasonable? Explain.
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- I need help with writing a formula in Excel. 6. The management has decided to go for upfront payments for 1-year instances. AWS has tie-up with eCommerceBanque Inc, wherein the bank provides loan to AWS customers for paying the upfornt payment for the reserved instance. The bank has provided loan of $2102 to the firm. The loan duration is for 1 year and the payments are required to be paid monthly (at the end). The monthly payment is $187.61 (that is the same amount charged by AWS). (i) Enter the values of number of periods, Monthly payments, Present Value and Type in cells C32, C33, C34 and C36 respectively. (ii) Write a formula in cell C37 to compute the monthly interest rate charged by the bank.(iii) Write a formula in cell C38 to convert the value calculated in C37 to annual rate.A commercial real estate developer plans to borrow money to finance an upscale mall in an exclusive area of the city. The developer plans to get a loan that will be repaid with uniform payments of $300,000 beginning in year 2 and ending in year 16. How much will a bank be willing to loan at an interest rate of 13% per year? The bank will be willing to loan the developer a sum of $Ace Development Company is trying to structure a loan with the First National Bank. Ace would like to purchase a property for $3.50 million. The property is projected to produce a first year NOI of $140,000. The lender will allow only up to an 80 percent loan on the property and requires a DCR in the first year of at least 1.25. All loan payments are to be made monthly but will increase by 3.5 percent at the beginning of each year for five years. The contract rate of interest on the loan is 5.5 percent. The lender is willing to allow the loan to negatively amortize; however, the loan will mature at the end of the five-year period. Required: a. What will the balloon payment be at the end of the fifth year? b. If the property value does not change, what will the loan-to-value ratio be at the end of the five-year period? Complete this question by entering your answers in the tabs below. Required A Required B What will the balloon payment be at the end of the fifth year? (Do not round…
- AS an accountant at City Bank in Boston, Ken, the Loan Officer called you for some help on a loan application that he is working on. One of his customers is looking for a $50,000 loan for a car. He is offering him a 7% 5 year $50,000 loan and asking you to help him calculate the installment amount. This is the data Ken sent you: Face Amount of Loan $50,000 Contract Rate… 7% Term of the Loan….. 5 yearsWhat formula do I utilize to find out the annual net revenue I'll receive for a property? For example, If I were to purchase a commercial property for $8,950,000 with an interest rate of 3.5% and a term of 30 years. I put down 25% which is $2,237,500, which would make my loan amount equate to $6,712,500. This particular commercial real estate property has a NOI (Net Operating Income) of $494,040yr, the debt service is $361,705yr, and the cashflow is $132,335yr. Would my net revenue equate to $494,040yr or $132,335yr?You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,360,000; rents are estimated at $174,080 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d.…
- (Related to Checkpoint 18.2) (Calculating the cost of short-term financing) The R. Morin Construction Company needs to borrow $110,000 to help finance the cost of a new $165,000 hydraulic crane used in the firm's commercial construction business. The crane will pay for itself in one year, and the firm is considering the following alternatives for financing its purchase: Alternative A. The firm's bank has agreed to lend the $110,000 at a rate of 13 percent. Interest would be discounted, and a 15 percent compensating balance would be required. However, the compensating-balance requirement is not binding on the firm because it normally maintains a minimum demand deposit (checking account) balance of $27,500 in the bank. Alternative B. The equipment dealer has agreed to finance the equipment with a 1-year loan. The $110,000 loan requires payment of principal and interest totaling $128,909. a. Which alternative should Morin select? b. If the bank's compensating-balance requirement had…Please show me how to solve this in excel using an excel spreadsheet and please show the excel formulas! Thank You! A house price of $100,000 can be financed with two loans below with monthly payments. The total origination cost associated with these two loans in the table attached is $3000. Alternatively, the borrower can borrow one loan in the amount of $90,000 with monthly payments and origination cost of $2,000. What should the interest rate be on the loan of $90,000 so that the borrower will be indifferent between these two choices?You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,430,000; rents are estimated at $183,040 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 8 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 4 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d. What…
- A computer chip designer purchased a car for $59,476.47, which includes sales tax and registration. The designer obtains a 5-year loan for the total amount at an annual interest rate of 6.3% compounded monthly. The designer will make monthly payments. The payments calculation for this type of loan uses the formula for the present value of which type of annuity? Given the formula for the payment amount of annuity where PMT is the payment amount in dollars, PV is the present value in dollars, n is the number of payments, and i is the interest rate per period. PMT= ? Determin the following values. PV= $ n= i= What is the designer’s monthly payment? (Round your answer to the nearest cent.)You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,350,000; rents are estimated at $172,800 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 7 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d.…You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,400,000; rents are estimated at $179,200 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 8 percent interest for 30 years (total annual payments will be monthly payments 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor's expected before-tax internal rate of return on equity invested (BTIRR)? d. What is…
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