Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please use excel work book to answer it Question 2 Maktan Construct is considering an investment which costs $6,500 and has an estimated cash flows

Please use excel work book to answer it

image text in transcribed

Question 2 Maktan Construct is considering an investment which costs $6,500 and has an estimated cash flows of $1,500, $1,800, $2,500, $1,920, $2,543 in years 1 to 5, with an IRR of 10%. Management intends to borrow the investment sum from Landi Bank, using the estimated cash flow from the project to finance the loan. a. As a loan officer at Landi Bank, set up a loan table for Maktan with the details above. (use Excel work book) (10 marks). b. After setting up the loan table, you noticed a miscalculation of Maktan's IRR, set up another table to correct the internal rate of return for this investment. (10 Marks). c. If Landi Bank charges 12% interest rate for its loans, construct a loan table detailing an equal value payment plan for Maktan, running for 5 years. (10 Marks). Question 2 Maktan Construct is considering an investment which costs $6,500 and has an estimated cash flows of $1,500, $1,800, $2,500, $1,920, $2,543 in years 1 to 5, with an IRR of 10%. Management intends to borrow the investment sum from Landi Bank, using the estimated cash flow from the project to finance the loan. a. As a loan officer at Landi Bank, set up a loan table for Maktan with the details above. (use Excel work book) (10 marks). b. After setting up the loan table, you noticed a miscalculation of Maktan's IRR, set up another table to correct the internal rate of return for this investment. (10 Marks). c. If Landi Bank charges 12% interest rate for its loans, construct a loan table detailing an equal value payment plan for Maktan, running for 5 years. (10 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Valuation And Bankruptcy

Authors: Ian Ratner, Grant T. Stein, John C. Weitnauer

1st Edition

0470462388, 978-0470462386

More Books

Students also viewed these Finance questions