Finance - Times Value of Money and Risk and Return Analysis

BEACON LIGHTING(BLX)
Finance

Finance
FINANCE 1

FINANCE 2
The main aim of this report is to discuss the topic of “Times Value of Money and risk and return
analysis”. The report has been classified into three parts such as Part 1, Part 2 and Part 3. In this
paper, Beacon Lighting (BLX) has been taken into consideration from the case study in order to
evaluate the questions.
Part 1
A.
APR 6%
Years 5
Periods 60
Periodic Rate 0.50%
PMT $ 891.00
Amount Borrowed = $46,087.47
It has been evaluated that the amount of the company has been borrowed in 5 years is $46,087.47
with the 6% of interest.
B.
Annual Revenue
(million) $ 247.70
Annual Rate of growth 9.90%

FINANCE 3
Annual Revenue of the company is $1,509.23 in 5 years and it is growing by the percentage of
9.90%.
C.
Loan A Loan B Loan C
Rate 5.45% 5.50% 5.40%
Compounding Monthly
Semi
Annually Daily
EAR 5.59% 5.63% 5.60%
The EAR of the company in three types of loan such as Loan A, B, and C is 5.59%, 5.63% and
5.60% in a respective manner. The least effective rate have in three loans is Loan A, and it can
be said that Loan A must be chosen by the company.
D.
Computation of amount of payments of loan
Loan amount
$
1,650,000.00
Year of loan 20
Number of periods 40
Interest rate (annual) 4.20%
Applicable rate 2.10%