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Kerry Johnson is applying for a loan so that he can purchase a new machine from overseas for his printing business. Due to the
Kerry Johnson is applying for a loan so that he can purchase a new machine from overseas for his printing business. Due to the uncertainties in importing tariff, Kerry estimates that the machine may cost either $150,000 or $185,000 when he places the order. The loan interest rate can also fluctuate between 5% and 7%. Kerry plans to pay off the loan in 10 years. Use the accompanying Loans spreadsheet model to answer the following questions. Click here for the Excel Data File a. Help Kerry plan the best- and worst-case scenarios for his loan using Scenario Manager. What are the monthly payment amounts for the best- and worst-case scenarios? Note: Round your answers to 2 decimal places. Best-case monthly payment Worst-case monthly payment 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 wants to break even, assuming a 10-year loan with 6% interest? Note: Round your answer to 2 decimal places. Loan amount
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