1. The interest rate for a 3 years EUR 50,000 loan is r = (1.0...

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" 1. The interest rate for a 3 years EUR 50,000 loan is r = (1.0 + q/5) %. r (%) Calculate the annual instalment and the total cost of finance for a fixed instalment plan. CF = (Rx) 2. The annual instalment of a fixed instalment 3 Years leasing contract is the same as that calculated above (Subject 1). The interest rate is also the same as above. The down payment is 40%, the residual value is 10% and the management fee is 1% flat (of the total value). Calculate the total value of the contract and the cost of finance. TV CF = (Rx)+MF 3. Brasov airport is a business investment of EUR (55+q/5) mil. with an opportunity cost of capital r of 4%. The expected revenue of this business in the first 5 years of operation is EUR 10 mil. in the first year of operation, with a growth rate g = 20% each year. There is some uncertainty over the construction and authorization delays. Please, calculate the NPV in these three scenarios: Scenario 0 - No delays. The investment is made in year 0 and the first income year is year 1. Scenario 1 - 1 year delay. The investment is made in year 0 and the first income year is year 2. Year 1 brings zero cashflow. Scenario 2 - 2 years delay. The investment is made in year 0 and the first income year is year 3. Years 1 and 2 bring zero cashflow. NPVO = NPV1 = + Would you invest? Explain your decision: NPV2 = Calculate the minimum growth rate g_min= in the worst Scenario 2. % for which this business is worth doing even " 1. The interest rate for a 3 years EUR 50,000 loan is r = (1.0 + q/5) %. r (%) Calculate the annual instalment and the total cost of finance for a fixed instalment plan. CF = (Rx) 2. The annual instalment of a fixed instalment 3 Years leasing contract is the same as that calculated above (Subject 1). The interest rate is also the same as above. The down payment is 40%, the residual value is 10% and the management fee is 1% flat (of the total value). Calculate the total value of the contract and the cost of finance. TV CF = (Rx)+MF 3. Brasov airport is a business investment of EUR (55+q/5) mil. with an opportunity cost of capital r of 4%. The expected revenue of this business in the first 5 years of operation is EUR 10 mil. in the first year of operation, with a growth rate g = 20% each year. There is some uncertainty over the construction and authorization delays. Please, calculate the NPV in these three scenarios: Scenario 0 - No delays. The investment is made in year 0 and the first income year is year 1. Scenario 1 - 1 year delay. The investment is made in year 0 and the first income year is year 2. Year 1 brings zero cashflow. Scenario 2 - 2 years delay. The investment is made in year 0 and the first income year is year 3. Years 1 and 2 bring zero cashflow. NPVO = NPV1 = + Would you invest? Explain your decision: NPV2 = Calculate the minimum growth rate g_min= in the worst Scenario 2. % for which this business is worth doing even

Answer rating: 100% (QA)

1 To calculate the annual installment and the total cost of finance for a fixed installment plan we need to use the given interest rate formula r 10 q... View the full answer