2. Given the proposed income statements and the pre-opening expenses, what would be the loan amount? What would be the monthly payments?

117,000.70 + 81,333.31 + 60,594.47 = $258,948.48

(Loan amount needed)

5000 + 5000 + 22,000 + 20,000 + 25,000 + 258,948.48 + 25,000 = 360,948.48

(Monthly Payments)

P= r (PV) / 1- ( 1 + r)^n

360,948.48(0.0075/ [1-(1+0.0075 - 360)] = Approx. $2,936.87 per month

Acid Test Ratio ( 0.50)

(1,200 + 4,300 + 4,781) / 24,376 = 0.42

She may not be eligible to get approved for a loan because her ratio of 0.42 doesnt meet the requirements of the Acid-test ratio of 0.50

3. Given the information in Question 2, create a yearly cash budget for the new place for the first two (2) years?

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