Financing Analysis In order to launch the new gadget line, Acme is securing investor financing to cover
Question:
Financing Analysis In order to launch the new gadget line, Acme is securing investor financing to cover the first year of fixed costs from private investors. A first private investor is willing to loan Acme the funds needed to cover the fixed costs associated with producing the chosen gadget to be paid back over 12 equal payments, with a fixed cost of borrowing of $1,350,000. A second investor is willing to loan the money under a simple interest payment plan of 2.5% interest but requires the loan be repaid in 6 months. Given that Acme will have to borrow Y dollars, provide Acme with a detailed comparison of the financing options and determine how each impacts the breakeven analysis below.
Breakeven analysis
The following Cost and Sales projections were captured by the Acme's production and Sales/Marketing teams.
Advertising and Promotion An Integrated Marketing Communications Perspective
ISBN: 978-0078028977
10th Edition
Authors: George Belch, Michael Belch