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Mba 620 Project 4 Financing And Investing I Need Help With The Following Calculations

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Mccormick amp; Company is considering building a new factory in Largo, Maryland. James Francis, a landowner, is selling a 4.35-acre parcel of industrial
company. The competing manson5:600,0 00.00 for the land. Mccormick amp; Company is interested in the land and so is another manufacturing
any has made an offer of $2,300,000.00 in cash and $300,000 each year for 15 years for the land
$4. 424.000 00 in easy knows it can make an offer to outbid the competitor to obtain the land. So, Mccormick amp; Company decided to offer
Now, the land owner, James Francis, must make a decision between the two competing offers. To make this decision, James should first identify the
g a 12 percent (12%
portfolios. Let’s help James make his decision by answering the following questions using the templateto the right.
1. What is the Future Value (FV) of each offer?
2. Based on your Future Value calculations, which offer should James accept?
Mccormick amp; Company has decided in order for the company to have a minimal impact on current cas
the form of acommercial meadows, the company will need to borrow
seventy percent (70%) Loan to Value (LTV) of the $4,424,000.00 offer in the form of a commercial acquisition and development loan to purchase the
land . This means Mccormick amp; Company will need to make a thirty percent (30%) down payment to secure the commercial acquisition and
development loan. Mccormick amp; Company is considering three different loan options:
Percent Down Amount Financed
Loan B : 10- year loan with a fixed annual interest rate of 4.5 percent
Loan C: 15-year loan with a fixed annual interest rate of 5 percent
PMI
3. How much of the total $4,424,000.00 offer will be financed?
4. Which loan will havethe lowest monthly payment?
5. Which loan will have the lowest total payback amount?
6. Would you recommend Mccormick amp; Company select the loan with lowest monthly payment or lowest total payment and why?Financial Accounting