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.

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?


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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 full answer

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