A project has current assets of $5M and fixed assets needs of $25M. The project will be funded with 40% equity and 60% debt capital. The debt capital must be repaid over 10 years in equal annual installments. The interest rate is 9%. 

Calculate the annual debt service assuming that the loan is to be calculated using the CRF approach.

Answer =

Question No. 10: You will be required to replace your car in five (5) years. You think the price of a car by then will be US$30,000 including duties, etc. If the minimum interest rate you think you can earn is 18% per annum net of tax, how much do you need to save in US equivalent annually?

Answer rating: 100% (QA)

Assuming the CRF approach the annual debt service can be calculated as follows First we need to calc... View the full answer