Question

Financing Instead of paying rent, UniVEND is consider purchasing several vending machines and operating them personally. To do this, Semih needs 500,000 TL in capital. Help Semih determine the best financing option for his business. Pts Part1 Option No. 1- Bank Loarn Answers Kar Bank has a special offer for SMEs, offering a 4-year loan at 1.1% monthly interest rate, payments made at the beginning of the period What are the monthly payments if Semih borrows 500,000 TL? How much of a down payment must Semih pay if he doesn't want his monthly payments to exceed 10,000 TL monthly? Semih has the option to extend the term of the loan to 5 years, but the monthly interest rate will increase to 1.2%. How much does this change his monthly payments? (HINT: find the difference from question 1a) Semih also spoke with a friend of his who works at Güneş Bank and he received the following offer monthly payments of 10,000 TL at a 1.05% monthly interest rate, followed by a lump sum payment of 60,000 TL at the end of the tem. Payments are made at the end of the period. What is the total term of the loan? Give your answer in terms of months If Semih wants to pay off the loan within 5 years (.e. 60 months), how much should he increase the lump sum payment to be paid at the end of the term? Instead of increasing the lump sum payment, perhaps Semih will just borrow less. How many can he borrow if he wants to pay off the loan in 5 years? Part2 Option No. 2-Investor Capital Answers Semih has found an investor who is willing to provide him with 500,000 TL in exchange for 30% ownership, which means he will take 30% of the annual profits. The investor generally seeks a 12% ROI for his investments Let's say Semih anticipates that he will have future profits of 200,000 TL per year for the forseeable future. What is the Present Value of the investment for the investor? Based on the investment amount, what is the total valuation of Semih's company? (Hint: if 30%-500,000 TL, then 100%-?) Semih has an ambitious growth plan and has put together the following profit projections see below). For 10 years, the investor will take 30% of the annual profits. After 10 years, the investor will exit the business by selling his shares back to Semih for 500,000 TL. Report the NPV for the investor, using a 12% ROI Report the IRR for the investor 1.5 12 Profit Projections Year 100,000.00 125,000.00 156,000.00 195,000.00 244,000.00 305,000.00 381,000.00 477,000.00 596,000.00 745,000.00 4 10

Answer 1