Answered step by step
Verified Expert Solution
Question
1 Approved Answer
begin{tabular}{|l|l|r|r|} hline & multicolumn{1}{|c|}{ A } & multicolumn{1}{c|}{ B } & multicolumn{1}{c|}{C} hline 1 & multicolumn{1}{|c|}{ Loan Payment Calculator } hline 2 &
\begin{tabular}{|l|l|r|r|} \hline & \multicolumn{1}{|c|}{ A } & \multicolumn{1}{c|}{ B } & \multicolumn{1}{c|}{C} \\ \hline 1 & \multicolumn{1}{|c|}{ Loan Payment Calculator } \\ \hline 2 & & \\ \hline 3 & Loan amount & $ & 150,000.00 \\ \hline 4 & Loan term (in years) & 10 \\ \hline 5 & Annual interest rate & 6% \\ \hline 6 & Monthly payment & \\ \hline 7 & & \\ \hline 8 & & \\ \hline \end{tabular} Kerry Johnson is applying for a loon so that he can purchase a new machine from oversess for his printing business. Due to the uncertainties in importing tariff, Kerry estimates that the machine moy cost either $150,000 or $185,000 when he places the order. The Ioon interest rate can also fluctuate between 5% snd 7%. Kerry plans to poy off the losn in 10 yesrs. Use the accomponying Loons spresdsheet model to answer the following questions. a. Help Kerry plan the best- and worst-case scenarios for his losn using Scenario Manager. What are the monthly poyment amounts for the best-and worst-case scenarios? Note: Round your answers to 2 decimal places. b. Kerry estimates that his monthly revenue increase due to the new machine will be $2,500. What is the loan amount that Kerry can afford if he wonts to bresk even, assuming a 10 -year loen with 6% interest? Note: Round your answer to 2 decimal places. c-1. Kerry is able to find domestic manufacturer that makes the same equipment. The cost of the machine is $220,000 if Kerry purchoses it from the domestic manufacturer, but the company offers Kerry o fovorable 4% loon for a 10 -yeor term. Compore Kerry's monthly payment if he purchases from the domestic manufacturer to the scenarios he crested earlier. Note: Round your answer to 2 decimal places. c.2. Should Kerry purchase from the domestic manufacturer? Yes No
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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