Concept explainers
Case synopsis:
Company SS is an aircraft company which was formed by Person M and Person T. The owners of the company are satisfied by the work of Person C who has done the financial planning for the company. The owners of the company wishes to expand their operations with their existing equipment but with a larger manufacturing facility.
Person M and Person T have found a suitable structure that is for sale and they believe that they can purchase and refurbish it for $35 million. The owners of the company now meet Person CV, the loan officer of FUN Bank. The meeting is mainly to talk about the mortgage options that are available for the company to fund the new facility.
Characters in the case:
- Company SS
- Person C
- Person M
- Person T
- Person CV
- FUN Bank
Adequate information:
- Person CV discusses about the 30-year mortgage loan and the 20-year mortgage loan.
- Person M asks Person CV about the smart loan.
- Person CV agrees with Person M about the smart loan and also states about the bullet loan or balloon payment.
- Person T asks Person CV about the interest-only loan.
To calculate: The monthly payments for a 30-year traditional mortgage and the monthly payments for a 20-year traditional mortgage.
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F371 Essn. of Corporate Finance >C< By Ross MCG Custom ISBN 9781259320576
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