Here is all the data in reference for the EBITDA and Net Cash Flow from the equation. I'm familar with a good

portion of the question, but how do you find "The NPV for the Overall Investment"?. A little unsure there. Thank you

in advance for your help!

You are interested in taking over a business. Owner is asking $180,000 and you require 20 percent return on your investment. Answer the questions using the following forecasted cash flows. Year Net Cash Flow 1 4,170 4,432 2 3 4,658 4 4.936 EBITDA 16,000 16,500 17,000 17,500 18,500 19,500 20,500 21,500 22,500 5 5.526 6 7 6,107 6,678 7,239 S 9 7,759 10 23,500 8,327 1. You found a lender that will lend you money at 8 percent with 15-year term. How much can you afford to pay annually if the lender has a DSC ratio of 1.6 (use year 1 EBITDA)? What is the maximum amount can you borrow with that payment amount term, and interest rate (round up to nearest hundred, i.e. 52,720 to 52,800)? N I/Y PV PMT FV 2. What will be the capital structure if you borrowed $100,000? Source: $ 9 Equity Debt 3. What is the maximum amount a lender would be willing to lend if the lender had a Loan-To-Value (LTV) ratio of 60%? 4. What is the maximum interest rate you can afford if you want to borrow $100,000 with a 15-year term and can afford maximum $10,000 a year? What will be a reasonable term for 8 percent interest rate? I/Y PMT N PV FV Assume you borrowed $99,000 at 8 percent for 15 years. 5. Looking at forecasted EBITDAs, what will be first year's Debt Service Coverage (DSC) ratio? N I/Y PV FV PMT 6. What is the weighted average cost of capital (with and without tax, which is 30 percent)? 7. You will use straight-line depreciation method. Asset has 25-year useful life and no salvage value. What will be the annual depreciation? 8. Assume you will sell this business at the end of year 10 for $300,000. What will be the proceedings to equity? 9. You forecasted cash flows for 10 years. Do you think this project is feasible (use WACC without tax for overall investment)? Year EBITDA Cash Flow 0 1 4,170 2 9 16,000 16,500 17,000 17,500 18,500 4,685 4 4,936 5 6 19,500 5,526 6,107 6,675 7 20,500 S 7,239 21,500 22,500 7,789 10 NPV: IRR: You are interested in taking over a business. Owner is asking $180,000 and you require 20 percent return on your investment. Answer the questions using the following forecasted cash flows. Year Net Cash Flow 1 4,170 4,432 2 3 4,658 4 4.936 EBITDA 16,000 16,500 17,000 17,500 18,500 19,500 20,500 21,500 22,500 5 5.526 6 7 6,107 6,678 7,239 S 9 7,759 10 23,500 8,327 1. You found a lender that will lend you money at 8 percent with 15-year term. How much can you afford to pay annually if the lender has a DSC ratio of 1.6 (use year 1 EBITDA)? What is the maximum amount can you borrow with that payment amount term, and interest rate (round up to nearest hundred, i.e. 52,720 to 52,800)? N I/Y PV PMT FV 2. What will be the capital structure if you borrowed $100,000? Source: $ 9 Equity Debt 3. What is the maximum amount a lender would be willing to lend if the lender had a Loan-To-Value (LTV) ratio of 60%? 4. What is the maximum interest rate you can afford if you want to borrow $100,000 with a 15-year term and can afford maximum $10,000 a year? What will be a reasonable term for 8 percent interest rate? I/Y PMT N PV FV Assume you borrowed $99,000 at 8 percent for 15 years. 5. Looking at forecasted EBITDAs, what will be first year's Debt Service Coverage (DSC) ratio? N I/Y PV FV PMT 6. What is the weighted average cost of capital (with and without tax, which is 30 percent)? 7. You will use straight-line depreciation method. Asset has 25-year useful life and no salvage value. What will be the annual depreciation? 8. Assume you will sell this business at the end of year 10 for $300,000. What will be the proceedings to equity? 9. You forecasted cash flows for 10 years. Do you think this project is feasible (use WACC without tax for overall investment)? Year EBITDA Cash Flow 0 1 4,170 2 9 16,000 16,500 17,000 17,500 18,500 4,685 4 4,936 5 6 19,500 5,526 6,107 6,675 7 20,500 S 7,239 21,500 22,500 7,789 10 NPV: IRR