Reference no: EM133046819
Question - The construction cost of the freight terminal is estimated at $20 million. You have been asked to prepare a report for the company's Board of Directors to evaluate the best financing arrangement under different scenarios. You have narrowed down your choices to the following alternatives:
Alternative 1: Raise the required amount from the proceeds of a new 6% coupon bond with a face value of $ 21,764,514.48, and a maturity period of 5 years. The annual market interest rate is 8%. The coupon payment is payable semiannually.
Alternative 2: A private equity firm has offered to finance the entire construction in a financing arrangement whereby Babosa Freight Inc. would make ten equal semiannual installment payments of exactly $2,465,817.61 each for five years. The appropriate annual market interest rate implied in the arrangement is 8%.
Required - Round answers to the nearest whole dollar Please use the provided PV tables.
-Determine the annual interest expense for the year ending December 31, 2018 for each e financing alternative.
-Which financing alternative would you recommend to Babosa Freight's Board of Directors if the company's objective is to show the lowest reported long term debt liability on its balance sheet for the year ended December 31st 2018? You must support your recommendation with all necessary calculations.
|
Homicide case-describe the circumstances surrounding
: Describe the circumstances surrounding the case. Determine the procedures for conducting a preliminary death investigation.
|
|
Restorative principles
: what is "Restorative Justice" and what are its principles? How do you feel that these principles differ from traditional criminal justice practices?
|
|
What is the percentage of completion
: SM Residences entered into a 3-year agreement in to construct a condominium project for a contract price of P10,000,000. What is the percentage of completion
|
|
What is the annual risk-free rate
: In this problem there are only two risky stocks, A and B, whose details are listed the table below. What is the annual risk-free rate
|
|
Determine the annual interest expense for the year ending
: Determine the annual interest expense for the year ending December 31, 2018 for each e financing alternative
|
|
Determine the beginning owner equity of a business
: Determine the beginning owner's equity of business having an ending owner's equity of $6,200, withdrawals of $2,250, and after closing the revenues and expenses
|
|
What is Katy basis in the stock of Perry
: After these exchanges, Perry has outstanding 10,000 shares of common stock. What is Katy's basis in the stock of Perry
|
|
Calculate the Employment Insurance premium
: Calculate the Employment Insurance premium on the $1,254.00 bi-weekly pay for an employee working in Prince Edward Island
|
|
Calculate the break-even number of helmets
: Question - Head-First Company plans to sell 4,400 bicycle helmets at $72 each in the coming year. Calculate the break-even number of helmets
|