please answer within 30 minutes. You are interested buying a business and thecurrent owner is asking $180,000 for it. You requirea 20 percent return on your investment. Answer thequestions below using the following forecasted cashflows.YearEBITDANetCashFlow116,0004,170216,5004,43217,0004,688417,5004,93618,5005,52619,5006,107720,5006,67821,5007,2399.22,5007,7891023,5008,327What is the maximum interest rate you can afford ifyou want to borrow $100,000 with a 15-year term andcan only afford payments of $10,000 a year? What willbe a reasonable term for 8 percent interest rate?NI/YPVPMTFV3.

Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

You are interested buying a business and the current owner is asking $180,000 for it. You require a 20 percent return on your investment. Answer the questions below using the following forecasted cash flows. Year EBITDA Net Cash Flow 16,000 4,170 2 16,500 4,432 17,000 4,688 4 17,500 4,936 1. 3.

You are interested buying a business and the current owner is asking $180,000 for it. You require a 20 percent return on your investment. Answer the questions below using the following forecasted cash flows. Year EBITDA Net Cash Flow 16,000 4,170 2 16,500 4,432 17,000 4,688 4 17,500 4,936 1. 3.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5EB: A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment...

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Question

please answer within 30 minutes.

You are interested buying a business and the
current owner is asking $180,000 for it. You require
a 20 percent return on your investment. Answer the
questions below using the following forecasted cash
flows.
Year
EBITDA
Net
Cash
Flow
1
16,000
4,170
2
16,500
4,432
17,000
4,688
4
17,500
4,936
18,500
5,526
19,500
6,107
7
20,500
6,678
21,500
7,239
9.
22,500
7,789
10
23,500
8,327
What is the maximum interest rate you can afford if
you want to borrow $100,000 with a 15-year term and
can only afford payments of $10,000 a year? What will
be a reasonable term for 8 percent interest rate?
N
I/Y
PV
PMT
FV
3.

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