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please answer with clear explanation.... 9000 2000 Cost of oil (COGS) per year Infusion equipment Bottling equipment Other materials Financing interest rate Compounding periods per
please answer with clear explanation....
9000 2000 Cost of oil (COGS) per year Infusion equipment Bottling equipment Other materials Financing interest rate Compounding periods per year (CY) Length of amortization (years) Savings Property and truck cost {A} {B} {C} {D} {E) 6000 4800 0.035 {G} {H} monthly 5 28500 163000 0.047 9 Mortgage rate Term of mortgage Bond face value Time until maturity Bond rate {0} {K} {L) {M} {N} 42000 4 0.046 Mini-Case Jenna, Jean and Kim started a flavoured olive oil business in their Cost of oil (COGS) {A} final year at Cambrian College under the name "Pizazz". Infusion equipment {B} Costs included purchasing the oil, special equipment to infuse the flavours into the oil, bottling equipment and bottles, and other Bottling equipment {C} materials. Other materials {D} Startup Loan The entrepreneurs financed the total of these costs with end-of-month payments through a loan from the bank at {E} compounded {F}, amortized over {G} years. They began selling the flavoured olive oil to local restaurants, at the local farmer's market, and online. Pizazz was the talk of the college campus and it was making a modest profit. After graduating, it was decided that they should expand their operations by renting a retail store in the city and adding 10 new flavours to their product line. They also hired an assistant to run the store, and a delivery person to handle personal orders. After two years of successfully managing Pizazz, they managed to save {H}. At this time, they must decide if they should invest their savings in property (capital expenditures) or investment bonds. W Capital Expenditures Their savings can be used as a down payment to purchase a warehouse property with manufacturing capabilities, and a delivery truck. The property and truck have a combined total cost of {1}, of which {H} will be required as a down payment. The fixed interest rate on the mortgaged amount (for the property and truck) is {J} compounded {F} for a term of {K} years. nvestment Bonds {L} bond is set to mature in {M} years. The bond rate is {N} payable semi-annually. The market rate is {J}, compounded {F} (the same rate available on the mortgage). Jenna, Jean and Kim will only purchase this bond if they can afford it, and if they can get it at a discoun because they think the market rate will go down, making the bond more valuable in the Tuture. e. What were their monthly payments to settle this mortgage? f. What will be the size of the final payment? g. Construct a partial amortization schedule for this loan. Feel free to use the template provided in the Excel Spreadsheet to help you. h. How long would it take to settle this loan with regular monthly payments of exactly $2000 instead of the PMT value calculated in part (e)? Investment Bonds i. Calculate the purchase price of the bond if it is purchased today ({M} years before maturity). j. Do Jenna, Jean, and Kim have enough money to buy their bond using their {H} in savings? Should they purchase the bond? Why or why notStep by Step Solution
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