Consider the following business funding options and determine the total repayment required:
(Option A- $200,000 business loan from XYZ bank. 10- year loan term for about 10% interest. 120 equal monthly payments of $2,643.)
Total Repayment: $ ?
Option B: $200,000 bond issuance to investors. 10 year bond maturity at 10% interest. $20,000 semi-annual interest payments for 10 years, then full repayment of $200,000 at 10- year maturity.
Total Repayment: $ ?
Option C: $200,000 stock issuance to investors. Investors will own 40% of the company. Total repayment: $ ??
Which is the best option for the following situations? Why is it the best option?
1. You have a new company with inconsistent profits and this will be the case for years to come.
A Option:
B. Why?
2. You have an established, profitable business and you are expanding into a new market and city.
A. Option:
B. Why?
3. You have a profitable business, but you are going to make a risky transition to a new product over the next few years and you may not be profitable over that time.
A. Option:
B. Why?
4. You have a new business with profits that are expected to go slowly but steadily for years to come.
A. Option:
B. Why?
Worth 33 points!!
Answers: 1
Other questions on the subject: Business
Business, 21.06.2019 21:00, kirathadoll
Concrete consulting co. has the following accounts in its ledger: cash; accounts receivable; supplies; office equipment; accounts payable; jason payne, capital; jason payne, drawing; fees earned; rent expense; advertising expense; utilities expense; miscellaneous expense. transactions oct. 1 paid rent for the month, $3,600. 3 paid advertising expense, $1,200. 5 paid cash for supplies, $750. 6 purchased office equipment on account, $8,000. 10 received cash from customers on account, $14,800. 15 paid creditors on account, $7,110. 27 paid cash for miscellaneous expenses, $400. 30 paid telephone bill (utility expense) for the month, $250. 31 fees earned and billed to customers for the month, $33,100. 31 paid electricity bill (utility expense) for the month, $1,050. 31 withdrew cash for personal use, $2,500. journalize the following selected transactions for october 2019 in a two-column journal. refer to the chart of accounts for exact wording of account titles
Answers: 2
Business, 22.06.2019 20:30, boog89
Mordica company identifies three activities in its manufacturing process: machine setups, machining, and inspections. estimated annual overhead cost for each activity is $156,960, $382,800, and $84,640, respectively. the cost driver for each activity and the expected annual usage are number of setups 2,180, machine hours 25,520, and number of inspections 1,840. compute the overhead rate for each activity. machine setups $ per setup machining $ per machine hour inspections $ per inspection
Answers: 1
Business, 22.06.2019 21:00, sophiateaches053
Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.
Answers: 1
Business, 23.06.2019 09:50, wolfgirl10000
If art has a 7/1 arm, how long will the fixed interest rate be applied to his loan?
Answers: 3
You know the right answer?
Consider the following business funding options and determine the total repayment required:
(Option...
Questions in other subjects:
Mathematics, 27.02.2020 02:55
