Fatima owns land and plans to build a small factory to produce imitation jewellery. She needs financing
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Question:
- Financing period 10 years
• Repayment quarterly instalments
- Detailed specifications of the asset - jewellery factory
- TIB profit margin 8% of construction cost
- TC will take 6 months to build the factory
- TC profit margin also 6% of construction cost
* TC requires downpayment of 10% of construction cost at contract
- Balance 60% payment to TC in six equal instalments over the 6 months of construction. Final 30% at delivery
b. What is the price at which the TIB will sell the factory to Fatima?
c. How much downpayment will the TIB pay to TC?
d. How much will be each instalment paid during construction to TC?
e. How much will the TIB pay TC at delivery?
f. What will be the instalment amount that Fatima will pay each quarter to the TIB over the 10 years?
Related Book For
Auditing The Art and Science of Assurance Engagements
ISBN: 978-0133405507
13th Canadian edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Joanne C. Jones
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