3rd time posting and I can provide any information that is needed, Thank you!

Vestas is concerned about the higher interest rate (8%) that NC Bank charges on the blades loan. In comparison, the turbine loan is less expensive (7%).

Given that NC Bank encourages voluntary loan principal repayments, with a 3% penalty, you want to investigate the possibility of repaying the blades loan principal as early as possible.

Starting from the provided APV model, proceed as follows:

• Insert a new independent variable that corresponds to the percentage of annual operating FCF that will be used to repay the loan principal, each year. You may consider starting at 10% of annual operating FCF to be used to repay the loan principal.
• Insert a new independent variable that corresponds to the annual penalty rate (3%) that NC Bank will charge on annual principal prepayments.
• Update the annual Financing Flows model for Blades loan so that it accounts for the two new independent variables.

Value drivers: Financing - This region contains two sub-regions named Turbines and Blades.

Blades
Purchase price	5,000,000,000
Interest only loan maturity (years)	5
Loan interest	8.00%

Blades

Starting principal

Interest

Interest tax shield

Ending principal

12/31/26	12/31/27	12/31/28	12/31/29	12/31/30	12/31/31
5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000
-	400,000,000	400,000,000	400,000,000	400,000,000	400,000,000
-	84,000,000	84,000,000	84,000,000	84,000,000	84,000,000
5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000	5,000,000,000

Net equipment 1 flows

5,000,000,000

(316,000,000)

(316,000,000)

(316,000,000)

(316,000,000)

(5,316,000,000)

NPV equipment 1 financing

228,838,268