McCormick & Company has decided in order for the company to have a minimal impact on current cash flows, the company will need to borrow seventy percent (70%) Loan to Value (LTV) of the $4,424,000.00 offer in the form of a commercial acquisition and development loan to purchase the land. This means McCormick & Company will need to make a thirty percent (30%) down payment to secure the commercial acquisition and development loan. McCormick & Company is considering three different loan options: Loan A: a 20-year loan with a fixed annual interest rate of 6 percent Loan B: a 10-year loan with a fixed annual interest rate of 4.5 percent Loan C: a 15-year loan with a fixed annual interest rate of 5 percent How much of the total $4,424,000.00 offer will be financed? Which loan will have the lowest monthly payment? Which loan will have the lowest total payback amount? Would you recommend McCormick & Company select the loan with the lowest monthly payment or lowest total payment and why?

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.