Paper , Order, or Assignment Requirements
NEWS has decided to purchase a new parcel of land in order to expand operations into a brand-new facility and retake the competitive advantage.
The Amortization Schedule below has been generated for your use in this assignment and in future professional/personal endeavors.
NOTE: Payment is calculated by using the PMT function in Excel, based on a given interest rate, total periods, present value borrowed (-), and future value
Question 1: NEWS would like to compare two different parcels, each of which is tied to a specific lender and the lender’s terms.
Parcel GREEN has the following conditions: Cost = $ 10,000,000; Annual Interest Rate = 11%; Loan Term = 25 Years
Parcel BLUE has the following conditions: Cost = $ 7,500,000; Annual Interest Rate = 20%; Loan Term = 15 Years
Provide your recommendation on which option is the best option and why.
Question 2: How does your answer change if NEWS is concerned with short-term profit margins?
How does your answer change if NEWS is concerned with long-term debt, due to a poor book value rating from the most recent stock analyst?