Follow the description Business & Marketing Case Study (Case Study Sample)

Instructions:

Casino.com Corporation is building a $25 million office building in Las Vegas and is financing the construction at an 80 % loan-to-value ratio, where the loan is in the amount of $20,000,000. This loan has a ten-year maturity, calls for monthly payments, and is contracted at an interest rate of 8%.
Using the above information, answer the following questions.
What is the monthly payment?
How much of the first payment is interest?
How much of the first payment is principal?
How much will Casino.com Corporation owe on this loan after making monthly payments for three years (the amount owed immediately after the thirty-sixth payment)?
Should this loan be refinanced after three years with a new seven-year 7 percent loan, if the cost to refinance is $250,000? To make this decision, calculate the new loan payments and then the present value of the difference in the loan payments.
Returning to the original ten-year 8 percent loan, how much is the loan payment if these payments are scheduled for quarterly rather than monthly payments?
For this loan with quarterly payments, how much will Casino.com Corporation owe on this loan after making quarterly payments for three years (the amount owed immediately after the twelfth payment)?
What is the annual percentage rate on the original ten-year 8 % loan?
What is the effective annual rate (EAR) on the original ten-year 8 % loan?
The mini case is required to be completed. The mini case is due on Sunday at 11:59pm. You are to write a minimum of 3 pages using in-text citations and the most recent published journals. All assignments must follow APA format style and submit for grading. The format of the cover page: Title, First Last Name, Course Title, Professor’s Name, Date Submitted. See attached APA format of referencing your paper.

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Casino.com Corporation is building a $25 million office building in Las Vegas and is financing the construction at an 80 % loan-to-value ratio, where the loan is in the amount of $20,000,000. This loan has a ten-year maturity, calls for monthly payments, and is contracted at an interest rate of 8%.
Using the above information, answer the following questions;
1 What is the monthly payment?
Solution
Monthly payment is calculated by;
Place Value = 20,000,000
The number of months for the whole period is;
n = 10 12 months = 120
Interest per month = 8/12 = .6667
Monthly payment will be;
PMT = ((20000000)/0.6667*120)= $242,655.19
2. How much of the first payment is interest?
Solution
During the first payment, the interest can be calculated as;
Interest= amount of the Loan interest rate each monthly
=$20,000,000 8%/12
Interest is = $133,333.333. How much of the first payment is principal?
Solution
In the first payment, the principal is calculated as;
Principal for the first month= payment for each month – Interest paid in first month
= $242,655.19 – $133,333.33
Principal = $109,321.86
4. How much will Casino.com Corporation owe on this loan after making monthly payments for three years (the amount owed immediately after the thirty-sixth payment)?
Solution

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Follow the description Business & Marketing Case Study (Case Study Sample)

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