QuickHelper

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Category > Accounting Posted 27 May 2017 My Price 11.00

ICS Manufacturing Company Case Study

Question description

 

Only do questions 5 & 9 ONLY. Please see the attached document for company information.

5. ICS plans on expanding their plant and will fund $2,000,000. Part of the funding will come from cash, but the balance of $775,000 will be financed. The interest rate will be 5% and ICS plans on borrowing the funds for 4 years. Prepare a loan amortization schedule for the 4 years with 5% interest for the $775,000 and assume making one payment per year. Show the schedule.

9. ICS plans to expand their operations as stated in Problem 5 - and are considering taking the loan - however, they have a few investors that are interested in lending money for this venture. They need a total of $775,000, and if they lend the money today, ICS will repay it, with interest, at the end of the year. Company A agrees to lend $300,000 and they require 5% interest, Company B will lend $200,000 at 6% interest, and Company C will loan the balance but they won't settle for less than 10% interest. What is the weighted average cost of this capital (WACC)? 

 

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QuickHelper
(10)
Status NEW Posted 27 May 2017 01:05 PM My Price 11.00

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