Finance Case Study - Installment Payment

Added on - Oct 2019

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FinanceName of the Student:Name of the University:Authors Note:
Table of ContentsAnswer to question 1:.................................................................................................................3Answer to question 2:.................................................................................................................7Answer to question 3:.................................................................................................................9Bibliography.............................................................................................................................11
Answer to question 1:Answer to part a:In the given case, the question asks about the present values of the all instalmentpayment that will be received by the company. The company has initiated a sale but thepayment will be received in 48 equal instalment. To meet its needs the company needs todiscount the payment receivable form the bank. When the rate of discount is 7% compoundedmonthly, the payment will be calculated by calculating the Present values of annuitycompounding on monthly basis. Further, as the interest is compounding monthly therefore themonthly interest rate is required to be considered.Rate Of Discount7%compoundingMonthlyInstalment per month10000payment Period48Monthly Interest rate0.583%Present valve of monthly instalments (Annuity)417602.0141The Deta Of the Bega Cheese is as follows:Bega cheese (BGA)Case Company DataInstalment Per Month10000Annual Total Revenue ($ millions)1438.28Annual Growth in total Revenue7.40%Loan A ( APR Compounding Frequency)7%Loan b ( APR Compounding Frequency)6.95%Loan C ( APR Compounding Frequency)6.97%Property Cost8,11,000.008 Year Bond annual coupon rate5.60%8 year current price117.006 year Bond Required rate of Return4.10%Part b:
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