9. Refinancing: Company A wants to expand its productive capacity and borrow $1.3 million for 20 years at 5.6%, compounded four times a year. After 16 quarterly payments of $26,235, the company wants to refinance its loan for 15 years at 4.9%, compounded quarterly. There is a one time refinance charge of $6000, added to the amount of the new, refinanced loan. a) Find the Unpaid Balance of the original loan after 16, quarterly pay periods. b) If the new refinanced loan has to cover the unpaid balance and the refinancing charge of $5000, find the amount of the new loan. c) Given the amount calculated in part b above, find the new quarterly payments for the refinanced loan. d) Provide evidence for either encouraging your company to refinance or not, by comparing your total payments from the old loan to the payments from the refinanced loan to see if refinancing saves you any money

9. Refinancing: Company A wants to expand its productive capacity and borrow $1.3 million for 20 years at 5.6%, compounded four times a year. After 16 quarterly payments of $26,235, the company wants to refinance its loan for 15 years at 4.9%, compounded quarterly. There is a one time refinance charge of $6000, added to the amount of the new, refinanced loan. a) Find the Unpaid Balance of the original loan after 16, quarterly pay periods. b) If the new refinanced loan has to cover the unpaid balance and the refinancing charge of $5000, find the amount of the new loan. c) Given the amount calculated in part b above, find the new quarterly payments for the refinanced loan. d) Provide evidence for either encouraging your company to refinance or not, by comparing your total payments from the old loan to the payments from the refinanced loan to see if refinancing saves you any money

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 20P

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