Question: Please solve A,B,C,and D. Please show work. Thank you. I'm thinking of buying 6 Wendy's restaurants in Oklahoma. The revenues for the 6 Wendy's are
Please solve A,B,C,and D. Please show work. Thank you.
I'm thinking of buying 6 Wendy's restaurants in Oklahoma. The revenues for the 6 Wendy's are equal to twelve million per year. The earnings before taxes are two million per year. The tax rate is 40%.
The acquisition price is ten million. The bank debt is eight million (rate is 5%, 10-year maturity, interest-only payments).
The seller paper is two million. (interest-only payments)
At the end of ten years.
A) What is the balance of the bank debt due at the end of 10 years?
B) What is the balance of the seller paper due at the end of year 10?
C) How much interest has been paid on the bank debt during the 10 years?
D) How much interest has been paid on the seller paper at the end of 10 yrs?
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