Question

In: Finance

If you borrow the entire fund of your renovation project now (e.g. $100,000)

If you borrow the entire fund of your renovation project now (e.g. $100,000) from a bank at an interest of 6% compounded daily and the project takes 2 years to complete, what would be the actual value of your renovation work at completion?

Solutions

Expert Solution

if you borrow $100000 from bank today at 6% interest compounded daily, the actual value after 2 year on completion is $112748.57

 

The actual Value of completion = P (1+ i/m)mn

The actual Value of completion = 100000 (1+0.06/365)365×2

The actual Value of completion = 100000 × 1.12748572709

The actual Value of completion = $112748.57

 


The actual Value of completion = $112748.57

Related Solutions

You are the project manager for a new multimillion-dollar building renovation for your organization. The company...
You are the project manager for a new multimillion-dollar building renovation for your organization. The company needs to maximize the space that it has, and the best approach is to do a staggered build-out in order to better maximize the space in the existing building. You feel that the best approach was to negotiate with multiple contractors on a fixed-price contract. Different contractors discussed other contracts with you, particularly ones to address the current market fluctuations in the raw materials...
Your dream boat costs $100,000. You have $20,000 but you need to borrow the remaining $80,000....
Your dream boat costs $100,000. You have $20,000 but you need to borrow the remaining $80,000. Your bank offers you a loan with the following characteristics: APR of 5%, monthly payments, a maturity of 5 years. Assume that you can afford the original loan the bank offered you. Now consider the last month of your loan (the last month during which you make a payment). What is your balance at the end of the month? What is your balance at...
Your company is nearing completion of the renovation project mentioned in question 1. Your customer only...
Your company is nearing completion of the renovation project mentioned in question 1. Your customer only owns the one facility that you will be working in and they have asked you to provide a full 6D BIM as part of your required deliverables. Please identify at least one advantage your customer will find in receiving this deliverable and why it is an advantage. Also, please identify at least one disadvantage your customer will find in receiving this deliverable. Finally, your...
Suppose you inherited a building from your great aunt which you now own outright (e.g., you...
Suppose you inherited a building from your great aunt which you now own outright (e.g., you have complete ownership without any outstanding debt). If this building is 200,000 SF, rents for $12 per square foot per year, is expected to be on average 5% vacant, and costs $5 per occupied SF per year to operate, what is the expected Before-Tax Cash Flow for the building? answer $1,330,000 Now, you decide to complete some renovations on the building described in question...
Your company can lend at 5% and borrow at 6%. You have identified a project that...
Your company can lend at 5% and borrow at 6%. You have identified a project that requires an initial investment of $50,000, but you only have $21,000 available now, so you need to borrow the rest. Part 1 What is the minimum rate of return on the project to make it attractive?
Can you please do a Risk Response matrix for a home renovation? project management
Can you please do a Risk Response matrix for a home renovation? project management
Your firm has an average-risk project under consideration. You choose to fund the project in the...
Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm’s existing capital structure. If the cost of debt is 9.50%, the cost of preferred stock is 10.00%, the cost of common stock is 12.00%, and the WACC adjusted for taxes is 11.50%, what is the project’s NPV given the expected cash flows listed here? Category T0 T1 T2 T3 Investment −$800,000 Net working capital −$ 50,000 $ 50,000 Operating...
You have just started your business. However, you now require a cash infusion of $100,000. Do...
You have just started your business. However, you now require a cash infusion of $100,000. Do you secure debt or equity financing? Why?
You run a hedge fund with a line of credit that allows you to borrow $100...
You run a hedge fund with a line of credit that allows you to borrow $100 million at an annual interest rate of 5%. The minimum amount of time that you can borrow for is one day. There are 365 days in a year. The spot rate for a euro is $1.20. The spot rate for a yen is $0.0094. The spot rate between yen and euros is ¥125/€. Which currencies should you buy or sell to take advantage of...
. Your company is planning to borrow $300,000 now and repay it in equal installments during...
. Your company is planning to borrow $300,000 now and repay it in equal installments during the next four years at 5 percent annual interest rate to fully amortize the loan. Calculate the equal yearly installments to fully repay the loan. Show your Work b.   Prepare a complete schedule of amortization table for this loan. Show it   in a table.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT