The owners of the Wilson Building desire to refinance their building.They seek the following loan terms:

LOAN REQUEST:

Amount:$7,500,000

Rate:6.0%

Term:10 years

Amortization: 30 years

QUESTIONS:

(The following questions will guide you through the analysis that a lender goes through in deciding whether they want to pursue the loan and will help you better understand how to evaluate a deal)

1.Calculate the annual debt service (ADS).