Growth Rate Of a Company Question Answer 2022

Running head: QUESTION AND ANSWER
Question and Answer
Name of the Student:
Name of the University:
Author Note:

Answer to Question 1:Answer to Question 1:1
Table of Contents
Answer to Question 1:................................................................................................................2
Part a:.....................................................................................................................................2
Part b:.....................................................................................................................................2
Part c:.....................................................................................................................................3
Part d:.....................................................................................................................................4
Part e:.....................................................................................................................................5
Part f:......................................................................................................................................5
Answer to Question 2:................................................................................................................6
Part a:.....................................................................................................................................6
Part b:.....................................................................................................................................7
Answer to Question 3:................................................................................................................8
References:...............................................................................................................................11

Answer to Question 1:Answer to Question 1:2
Answer to Question 1:
Part a:
The amount of loan which is taken by the company for the equipment is $27724.9.
The calculation in excel is provided in the figure below along with the excel formula which is
used for the calculation.
Figure 1: Amount of Loan taken by the Company
Source: By the Author
Part b:
The growth rate of the company is calculated by using the following formula which is
provided below.
Forecasted Revenue= ( ( 1+Growth Rate ) Period )∗Current Revenue .
Using this formula in excel the revenue forecast for the company is calculated which
is $480.80 million in the next 5 years. The image of the calculation is provided below,

Answer to Question 1:Answer to Question 1:3
Figure 2: Annual Revenue Forecast
Source: By the Author
Part c:
The effective interest rate on an annual basis for the loan is calculated by using the
nominal interest rate. The effective interest rate is calculated from the following formula
which is presented below,
Effective Annual Rate=
( ( 1+ Nominal Interest Rate
Period )
Period
)−1
This formula is used in excel for all the three loan options which is available for the
company and the effective annual rate is calculated and presented in the table below,
Loan Type Effective Interest Rate
A 4.305%
B 4.318%
C 4.331%