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# Excel Lab Case 1 Gizmo Gizmo, a small manufacturing company whose ma

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Excel Lab Case 1: Gizmo Gizmo, a small manufacturing
company whose management wishes to reduce overhead
by installing a new, energy efficient heating system. The
new system costs \$100K. due to the company\'s
insufficient cash reserves, the management has decided
that borrowing money is the only way to finance the
desired improvement A problem arises when Gizmo\'s
accountant points out that a standard direct reduction loan
would severely strain the firm\'s cash flow during the
heating season. In order to overcome this difficulty, the
accountant suggests a periodic linear gradient series
repayment scheme (G-\$75) in a skip payment loan @ 12%
APR compounded monthly Month January-August
September-April May-September October-March April-
October November-February March-December Repayment
Yes Skip Yes Skip Yes Skip Yes 1. Develop a worksheet
repayment schedule for 4 years 2. Select the BB case
question link to enter the following information a. Initial
payment, Month #1 (first Jan payment) b. Last payment,
Month #48 C. Interest charged during Month #48 d. % of
PMT applied towards paying down the principal in Month
#1 e, 96 of PMT applied towards paying down the principal
in Month #48 f. Total interest paid at the end of the loan
Solution
schedule:APR
=12%1\$2,633.38\$1,000\$1,633.38\$98,366.62Time

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=4years2\$2,633.38\$983.67\$1,649.72\$96,716.903\$2,633.3
8\$967.17\$1,666.21\$95,050.68Repayment
schedule:4\$2,633.38\$950.51\$1,682.88\$93,367.81Jan-
AugYes(\$3,667.09)85\$2,633.38\$933.68\$1,699.71\$91,668.
10Sep-AprSkipPrinciple
outstanding\$86,466.326\$2,633.38\$916.68\$1,716.70\$89,95
1.40May-
SepYes57\$2,633.38\$899.51\$1,733.87\$88,217.53Oct-
MarSkip8\$2,633.38\$882.18\$1,751.21\$86,466.32Apr-
OctYes79\$2,633.38\$864.66\$1,768.72\$84,697.60Nov-
FebSkip10\$2,633.38\$846.98\$1,786.41\$82,911.19Mar-
OctYes811\$2,633.38\$829.11\$1,804.27\$81,106.92Total281
2\$2,633.38\$811.07\$1,822.31\$79,284.6113\$2,633.38\$792.
85\$1,840.54\$77,444.07Thereofre EMI for 28 months
=(\$2,633.38)14\$2,633.38\$774.44\$1,858.94\$75,585.1315\$2
,633.38\$755.85\$1,877.53\$73,707.6016\$2,633.38\$737.08\$
1,896.31\$71,811.2917\$2,633.38\$718.11\$1,915.27\$69,896.
0218\$2,633.38\$698.96\$1,934.42\$67,961.5919\$2,633.38\$6
79.62\$1,953.77\$66,007.8320\$2,633.38\$660.08\$1,973.31\$
64,034.5221\$2,633.38\$640.35\$1,993.04\$62,041.4822\$2,6
33.38\$620.41\$2,012.97\$60,028.5123\$2,633.38\$600.29\$2,
033.10\$57,995.4224\$2,633.38\$579.95\$2,053.43\$55,941.9
925\$2,633.38\$559.42\$2,073.96\$53,868.0226\$2,633.38\$53
8.68\$2,094.70\$51,773.3227\$2,633.38\$517.73\$2,115.65\$4
9,657.6728\$2,633.38\$496.58\$2,136.81\$47,520.8629\$2,63

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Excel Lab Case 1: Gizmo Gizmo, a small manufacturing company whose management wishes to reduce overhead by installing a new, energy efficient heating system. The new system costs \$100K. due to the company \'s insufficient cash reserves, the management has decided that borrowing money is the only way to finance the desired improvement A problem arises when Gizmo \'s accountant points out that a standard direct reduction loan would severely strain the firm\'s cash flow during the heating season. In order to overcome this difficulty, the accountant suggests a periodic linear gradient series repayment scheme (G-\$75) in a skip payment loan @ 12% APR compounded monthly Month January -August September-April May-September October-March AprilOctober November-February March-December Repayment Yes Skip Yes Skip Yes Skip Yes 1. Develop a worksheet repayment schedule for 4 years 2. Select the BB case ...
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