Prepare the following for discussion with a potential funder: Complete the table on both sides Qs 2
Question:
Prepare the following for discussion with a potential funder: Complete the table on both sides Qs 2 and 3; Answer all questions in this assessment. During this assessment, it was identified that there is a need for financing for the setup of the business and the first four months of business operations. All filled-in sections with figures have been provided. Figures that have been provided include the $150,000. $51851.25, and $112,500.00 which can be seen in the table below. (Do not change given figures)
Calculate and fill the blank 3 boxes which are remaining. Show working out if possible.
Fill in the funding amount required $150,000 (3 Years) | Loan (Debt funding) 7.0 % p.a. | Investor (Equity Funding) 25% p.a. |
Q1. What were the 3-year after-tax costs (interest and principal repayments) | $51851.25 | $112,500.00 |
Q2. What are the total repayments or dividend payments, if the company achieves its budgeted first-year profit? | (51851.25 divide 3 = 17283.75) 17283.75 x 7% x 2 = $2419.73 | |
Q3. What are the repayments and dividends if the company achieves nil profit in the first year? |
Expert Answer:
The detailed answer for the above question is provided below 1 The 3year aftertax costs of the loan and equity funding is 5185125 and 11250000 respect... View the full answer
