Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lindner Inc. is going to purchase new equipment with a price of $625.000, which the manufacturer is willing to finance, and Lindner Inc. is trying
Lindner Inc. is going to purchase new equipment with a price of $625.000, which the manufacturer is willing to finance, and Lindner Inc. is trying to work out a payment schedule. Due to cash flow needs elsewhere in the company, its payment budget per month is $15.000. After 36 months, it has the ability to add a balloon payment of up to S42,500; however, the manufacturer will only allow a balloon payment with its last monthly payment. Also, it will allow Lindner Inc. to make smaller additional principal payments, say $1,000 every month from the 1* month. The additional principal amount must be the same amount each month other than with the last payment, when the company can make the large balloon payment. Lindner Inc. has the choice to finance for 36, 48 or 60 months at an annual interest rate of 5%. But Lindner Inc. wants to pay off the loan as quickly as possible. Create the full amortization schedule (including any additional payment, such as the balloon payment). Stop the schedule with the month that has a beginning balance of zero, and show only the beginning balance for that month on the schedule (meaning, don't show payments for that month)
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