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Assume that Target plans to purchase several large machines to move product at each of its fulfillment centers. The total purchase price of the machinery
Assume that Target plans to purchase several large machines to move product at each of its fulfillment centers. The total purchase price of the machinery is approximately $450 million. Target will borrow the entire purchase cost of the machines. It will either take a 15 -year loan at 8%, with monthly payments OR a 5 -year loan at 10%, also with monthly payments. Show calculations on Excel the 'Target loan calculations' tab for the present value of each loan structure. Which loan would be more advantageous for Target? Explain your reasoning
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