14. Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate +1.5%. Capital expenditure Cash dividends Cash flow from operations before interest expense Yr.1 250,000 140,000 750,000 a). b). c). d). e). Yr. 2 125,000 140,000 780,000 Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3? 25,000 50,000 45,000 53,000 10,000 Yr. 3 75,000 140,000 800,000

14. Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate +1.5%. Capital expenditure Cash dividends Cash flow from operations before interest expense Yr.1 250,000 140,000 750,000 a). b). c). d). e). Yr. 2 125,000 140,000 780,000 Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3? 25,000 50,000 45,000 53,000 10,000 Yr. 3 75,000 140,000 800,000

Name: 14. Suppose that you have generated the estimates listed below from a
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Description: 14. Suppose that you have generated the estimates listed below from a pro forma analysis for a companythat had requested a three year loan. The loan is a $1.5 million term loan with the equal annual paymentsof principals. The P&I payments are due at

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 7P: Effective Cost of Short-Term Credit Yonge Corporation must arrange financing for its working capital...

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