Financial Analysis and Performance
Added on 2020-04-07
30 Pages4155 Words82 Views
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Running Head: Financial Problems AnalysisFinancial ProblemsAnalysis
Financial Problems Analysis1Table of ContentsQuestion-1.............................................................................................................................................1Question-2.............................................................................................................................................5Question-3.............................................................................................................................................6Question 4.............................................................................................................................................7Question 5.............................................................................................................................................8Question -6..........................................................................................................................................10Question 7...........................................................................................................................................13Question 8...........................................................................................................................................16Question 9...........................................................................................................................................18Question10..........................................................................................................................................19References...........................................................................................................................................22Appendix-1......................................................................................................................................23Appendix 2......................................................................................................................................27Appendix 3......................................................................................................................................29.........................................................................................................................................................29
Financial Problems Analysis2Question-1 Question-1(1)Amount per InstalmentLoan$20,00,000.00 Rate0.6667%TermsMonthlyNumber of Months120Instalment $ 24,265.52 Question-1 (2)Amount of Interest in 1st InstalmentOpening Loan Balance$20,00,000.00Rate0.67%Interest $ 13,333.33 Question-1 (3)Amount of Principal in 1st Instalment Instalment $ 24,265.52Less: Interest $ 13,333.33Principal $ 10,932.19Question-1 (4) Refer APPENDIX 1Remaining amount to be paid off after 36th payment$15,56,869.88 Question-1 (5) Refer APPENDIX 1 & 2Interest cost for the remaining $ 4,81,463.287 years @ 8 %Less: Interest cost for the 7 years @ 7% $ 4,16,906.58Interest Savings in Refinancing $ 64,556.70 Less: Refinancing Cost $ 2,50,000.00Net Loss
Financial Problems Analysis3$(1,85,443.30) Therefore the loan should not be Refinanced Question-1 (6)The Loan Instalment if paymentsare scheduled quarterlyLoan$20,00,000.00 Rate2%TermsQuarterlyNumber of Months40Instalment $ 73,111.50 Question-1 (7) Refer APPENDIX 3Remaining amount to be $15,55,905.65paid off by Casino.com after 12th payment Question-1 (8)The annual rate for 8% loan is the nominal rate and that is 7.7208Using r = m × [ ( 1 + I)1/m- 1Question-1 (9)Calculation of Effective RateNominal Rate8%CompoundingMonthlyPeriods120
Financial Problems Analysis4Effective rate8.30%
Financial Problems Analysis5Question-2 Question-2 (a)Market Rate Return=100-78.1278.12 =21.88 78.12 =28% (For 10 Years) = 2.8% p.a.Question-2(b)Face value100Coupon Rate0.00%YTM3.50%Interest0Periods9Bond price after one year₹ 73.37Return for the yearInterest for 1st year0Purchase price78.12Sale price₹ 73.37Return (%)-6.08%Question 2 (C) Face value10000Coupon2.50%YTM*2.50%Bo (Bond Price)1000
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