3 4 The purchase of a new irrigation system is requiring a loan of $61,450 at a 10% annual interest rate. 5 The investor figures on making annual payments of $10,000. 6 7 8 a) Find the length of the loan needed to make the investment financially feasible. 9 hint: Use the Excel function NPER, be extra careful with the sign of the cashflows 10 11 PV 12 13 pmt 14 N (Nper) 15 16 17 b) Suppose the loan length is limited to 8 years. What is the effect on loan size? 18 19 New N 20 New pmt 21 22 23 ) What other actions may affect feasibility? 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 1-Hogs Inflation 2-Certainty equivalent 3-Probability Analysis 4- Feasil