Question
9) Home Construction Company has requested a loan to finance the materials and labor required to build two homes in a new neighborhood. Construction is
9) Home Construction Company has requested a loan to finance the materials and labor required to build two homes in a new neighborhood. Construction is scheduled to take five months. Which combination of disbursement terms and repayment schedule is the most appropriate for this purpose?
A) Disburse loan funds as materials and labor are purchased; repayment will be expected in lump sums when the homes are sold. B) Disburse loan funds evenly throughout the construction period, and arrange repayment in installments over a five-year period. C) Disburse loan funds in one lump sum at the beginning of construction; repayment will be in monthly installments during the five months of construction. D) Disburse loan funds in one lump sum; repayment should be in equal installments over a 20-year period.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started