Liquidated and the amount remaining on the loan

Assignment Help Financial Management

Reference no: EM131048245

Heather has saved about $10,000 in cash. She also went and met with a local bank and they are willing to loan her $12,000 at 6% interest for 5 years to get her business started. The bank will require a first claim on any remaining merchandise if the business fails and Heather must sign a personal guarantee for the difference between what can be liquidated and the amount remaining on the loan, in the event of a default. The payments for the loan will be $231.99/month and Heather will pay about $663 in total interest the first year of the loan. Should Heather take the loan or use her own personal cash to help start the business? Don’t guess, don’t “go with your gut,” use proper analysis to answer this. Explain your answer in detail.

Reference no: EM131048245

Questions Cloud

What flaws were masked by suburban mass culture : Discuss the fear and condemnation expressed by some critics of mass culture in America after World War II. Specifically, what flaws were masked by suburban mass culture?

Job satisfaction in the banking industry or the logistical : Research consortium: the organisations that financed the research (banks) are both research subjects and are involved in the research design which could cause a conflict of interest. How could you deal with this ethical issue in this research situati..

Analyze the complexities of the intergovernmental relations : Understand how relationships between participants in the policy process (including official and nonofficial actors) influence the policy process.

Explain the authors thesis-the main point or points : Explain the author's thesis-the main point or points that he/she is trying to make in the article. This is not a description or summary of the article; it is an explanation of the author's purpose.

Liquidated and the amount remaining on the loan : Heather has saved about $10,000 in cash. She also went and met with a local bank and they are willing to loan her $12,000 at 6% interest for 5 years to get her business started. The bank will require a first claim on any remaining merchandise if the ..

How you organised your project time : FC6P01 Project - Payroll Calculator System. You MUST find someone to proof read your report, there are many grammatical errors, and phrases such as ‘health warning' above which are not explained. Add more on your approach, how you organised your pr..

Compute the amount that he must invest today : Newton Kris's plans to give her son $12500 when he is 21 which will be 5 years from now. if Newton finds an investment that will pay 8% compounded semiannually compute the amount that he must invest today to achieve his goal.

Present value of your annual cash payments : You have an opportunity to invest in a business venture. For just $50,000 invested on January 1st, you will receive $20,000 in after-tax cash flows per year on December 31st for 3 years. Using these factors, what is the Present Value of your annual c..

What is the estimated required rate of return on stock : Woidtke Manufacturing's stock currently sells for $37 a share. The stock just paid a dividend of $1.75 a share (i.e., D0 = $1.75), and the dividend is expected to grow forever at a constant rate of 4% a year. What stock price is expected 1 year from ..

User Account

All Pages