Description
Answer 3 of the questions with Excel Worksheets. There are 4 questions, but you only have to answer 3 of them. Skip whichever question you choose.
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Explanation & Answer
Attached.
Par value
Maturity period
N
pv
Tax rate
Coupon payments
1000
11
22
888,16
30%
35,5
Cost of debt
6,09%
Capital structure
Debt
Common equity
Preffered stock
60%
30%
10%
Cost of debt
Cost of equity
Cost of preferred stock
6,09%
10,81%
11,00%
WACC
7,997%
Year
0
1
2
3
4
5
6
Total Cash
cumulative
Flow
cashflow
$ (950.000,00) $ (950.000,00)
$240.000 ($710.000,00)
$280.000 ($430.000,00)
$320.000 ($110.000,00)
$440.000
$330.000,00
($70.000)
$260.000,00
$400.000
$660.000,00
Payback period
cost of capital
8,80%
3,25
Recommendation
The project violates the maximum required payback period of 3 years thus it should be rejected
NPV
$243.409,83
Recommendation
The project has a positive NPV therefore it is viable
LOAN AMORTIZATION SCHEDULE
ENTER VALUES
Loan amount
Interest rate per year
Repayment period
Number of payments per year
starting date
LOAN SUMMARY
Scheduled payment
number of payments
Actual number of payments
Total early payments
Total interest paid
$79.000,00
2,99%
7
12
4/28/2017
extra payments (optional)
PMT
NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
PAYMENT DATE
4/28/2017
5/28/2017
6/28/2017
7/28/2017
8/28/2017
9/28/2017
10/28/2017
11/28/2017
12/28/2017
1/28/2018
2/28/2018
3/28/2018
4/28/2018
5/28/2018
6/28/2018
7/28/2018
8/28/2018
9/28/2018
10/28/2018
11/28/2018
12/28/2018
1/28/2019
2/28/2019
3/28/2019
4/28/2019
5/28/2019
6/28/2019
7/28/2019
8/28/2019
9/28/2019
10/28/2019
11/28/2019
12/28/2019
1/28/2020
2/28/2020
3/28/2020
4/28/2020
5/28/2020
6/28/2020
7/28/2020
8/28/2020
BEGINNING
BALANCE
$79.000,00
$78.153,35
$77.304,58
$76.453,71
$75.600,71
$74.745,59
$73.888,33
$73.028,94
$72.167,41
$71.303,73
$70.437,91
$69.569,92
$68.699,77
$67.827,45
$66.952,96
$66.076,29
$65.197,43
$64.316,39
$63.433,15
$62.547,71
$61.660,06
$60.770,21
$59.878,13
$58.983,83
$58.087,30
$57.188,54
$56.287,54
$55.384,30
$54.478,80
$53.571,05
$...