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Robert and John are both looking to invest in the same project. The investment is $800,000. Robert plans to make 20% down payment and take
Robert and John are both looking to invest in the same project. The investment is $800,000. Robert plans to make 20% down payment and take a loan for $640,000000 (The cost of the loan is 6% annually). John invest $800,000 in cash in the project, he doesnt take any loan.
At the end of the project, a year later the project is sold for $960,000.
- What will be the profit for Robert and for John?
- What will be the return on capital for Robert and for John? .
Now, the project loses 20%.
- What will be the loses for Robert and for John?
- What be the negative return on Capital for Robert and for John?
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