This is the excel loan we have to fill out:

These are the instructions: some photos may be duplicates to see other instructions that were cut off. Please respond with answers next to the instruction #, Thank you!

A B D E F G G 1 2 Assumptions Comments Item Values Furniture Loan 3 4 4 $16,000 60 Amount being borrowed to purchased furniture How long the furniture will last before it needs to be replaced Estimate of new monthly revenue yielded from furniture investment 5 $600 6 Furniture's Lifetime (months) New Monthly Revenue Total New Revenue Short-term Investment Rate - $36,000 1.5% 7 Total new revenue yielded from furniture investment Annual interest rate from short-term cash investment 8 9 Loans 10 #1 #2 #3 #4 #5 #6 11 Interest Rate (Annual) 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 12 72 60 48 36 30 24 #of Monthly Payments Monthly Loan Payment 13 14 Total Payments 15 16 Practical 17 18 Regular Payoff 2 #2 19 During Loan Period #1 #3 #4 #5 #6 Actual Monthly Revenue 20 21 Total Revenue 22 Total Gained Including Interest After Loan Paid Off #1 #2 #3 #4 #5 #6 23 24 Months of New Revenue 25 Total Revenue Total Gained Including Interest 26 27 Return on Investment 28 29 Early Payoff #2 # 30 During Loan Period #1 #3 #4 #5 #6 31 Months to Payoff 32 33 Total Payments Months of New Revenue Total Revenue 34 35 Return on Investment 36 Intro Instructions Loan 2 Points 3 1 Loan - Instructions Modify the data in the Loan tab by following the instructions below. To view the instructions and data side-by-side, go to the View menu tab and click New Window. On the View menu tab, click Arrange All and select Tiled. Be sure to follow each step and answer the bolded questions in the space provided to the right. The Loan tab shows your assumptions. You will borrow $16,000 to purchase patio furniture which must be replaced in 5 years (60 months). The current bank saving rate is 1.5%. You believe this new furniture will produce $600 per month in additional revenue. The loan tab shows six possible small business loans. In row 13, calculate the Monthly Loan Payment of each of the loans using an appropriate function. Be sure to use relative and absolute references for the function parameters so you can copy the function across columns B to G. 4 2 Loans #1 #2 7.0% 5 3 6 9 10 11 12 13 14 15 16 Interest Rate (Annual) # of Monthly Payments Monthly Loan Payment Total Payments 8.0% 72 $281 $20,198 60 $317 $19,009 Practical FALSE TRUE 6 4 2 7 5 6 In row 14, calculate the total payment made over the duration of each loan In row 16, determine whether the loan is practical given the assumptions using the appropriate Boolean operator. To be practical, the monthly loan payment must be less than the new monthly revenue, and the number of monthly payments must be less than or equal to the furniture's lifetime in months. If the monthly payment is more than the new revenue, you risk incurring short- term debt. If the furniture needs to be replaced before you can pay off the loan, will have to take out another loan to maintain your outdoor dining area. In row 20, calculate the actual monthly revenue during the loan period. Consider that the loan payment will reduce the new monthly revenue that you expect. 18 19 20 During Loan Period Actual Monthly Revenue Regular Payoff #1 #2 $319 $283 + 12 10 2 13 11 6 14 12 2 In row 25, calculate the total new revenue gained after the loan is paid off. This is a simple formula based on the assumptions and a previously computed value. In row 26, calculate the total amount gained with interest assuming you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table In row 27, calculate the return on investment which is total amount gained with interest during and after the loan. Some of the loans are not feasible (see row 16). Add an IF statement to row 27 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. In row 31, use an appropriate financial formula to calculate how many months to pay off the loan early. By making larger payments each month, the loan can be paid off sooner. Assume you use all the new monthly revenue to pay off the loan, i.e., your loan payment is now equal to the new monthly revenue in the assumptions table. 15 13 5 16 14 5 29 30 31 32 33 34 35 Early Payoff During Loan Period #1 #2 Months to Payoff 29.5 29.1 Total Payments $17,676 $17,441 Months of New Revenue 30.5 30.9 Total Revenue $18,324 $18,559 Return on Investment Not Practical $18,910 17 15 2 In row 32, calculate the total payments made if you paid the loan off early. This is a simple formula based on a previously computed value and the assumption that your loan payment will be equal to the new monthly revenue. Compared to the total payments in row 14, is it advantageous to pay the loan off early? Explain your answer below. 18 16 5 19 In row 33, calculate the number of months of new revenue. This is a simple formula based on the furniture's lifetime and how many months it took to pay off the loan early. 20 17 2 6 4 2 7 5 6 In row 14, calculate the total payment made over the duration of each loan In row 16, determine whether the loan is practical given the assumptions using the appropriate Boolean operator. To be practical, the monthly loan payment must be less than the new monthly revenue, and the number of monthly payments must be less than or equal to the furniture's lifetime in months. If the monthly payment is more than the new revenue, you risk incurring short- term debt. If the furniture needs to be replaced before you can pay off the loan, will have to take out another loan to maintain your outdoor dining area. In row 20, calculate the actual monthly revenue during the loan period. Consider that the loan payment will reduce the new monthly revenue that you expect. 6 2 18 19 20 21 22 23 24 25 26 27 Regular Payoff During Loan Period #1 #2 Actual Monthly Revenue $319 $283 Total Revenue $23,002 $16,991 Total Gained Including Interest $24,053 $17,633 After Loan Paid Off #1 #2 Months of New Revenue -12 0 Total Revenue -$7,200 $0 Total Gained Including Interest -$7,142 $0 Return on Investment Not Practical $17,633 9 7 2 10 8 6 11 9 2 12 10 In row 21, calculate the total revenue during the loan period. This is a simple formula based on the # of months of the loan and a previously computed value. In row 22, calculate the total amount gained with interest assuming you invest the actual monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table. In row 24, calculate months of new revenue after the loan is paid off. This is a simple formula based on the length of the loan in months and the furniture's lifetime in months In row 25, calculate the total new revenue gained after the loan is paid off. This is a simple formula based on the assumptions and a previously computed value. In row 26, calculate the total amount gained with interest assuming you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table In row 27, calculate the return on investment which is total amount gained with interest during and after the loan. Some of the loans are not feasible (see row 16). Add an IF statement to row 27 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. 2 13 11 6 14 12 2 15 13 5 15 In row 32, calculate the total payments made if you paid the loan off early. This is a simple formula based on a previously computed value and the assumption that your loan payment will be equal to the new monthly revenue. Compared to the total payments in row 14, is it advantageous to pay the loan off early? Explain your answer below. 16 In row 33, calculate the number of months of new revenue. This is a simple formula based on the furniture's lifetime and how many months it took to pay off the loan early. 17 18 19 In row 34, calculate the total revenue gained from paying the loan off early. This is a simple formula based on the assumptions and a previously computed value In row 35, calculate the return on investment which assumes you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table Some of the loans are not feasible (see row 16). Add an IF statement to row 35 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. Among only the practical loans, which one yields the highest return on investment and why? Do you notice a connection between one of the loan parameters and the investment return? Explain. 20 21 22 Notice that paying off a loan early has a bigger impact on loan #2 compared to loan #5 in increasing the return on investment. Why is this the case? Explain below. You should notice that 4 of the loans are no longer practical after you changed your assumptions. Based on these observations and considering that your assumptions might be too generous, what is a good strategy for selecting a loan? Maximizing the return on investment is clearly important, but what else should you considerin picking a loan? Loans #2 #1 #3 #4 #6 26 8.0% 7.0% 5 72 Interest Rate (Annual) # of Monthly Payments Monthly Loan Payment Total Payments 6.0% 48 $376 $18,037 60 $317 $19,009 5.0% 36 $480 $17,263 #5 4.0% 30 $561 $16,840 3.0% 24 $688 $16,505 $281 $20,198 Practical FALSE FALSE TRUE TRUE FALSE FALSE 27 Loans #1 and #2 are not considered practical because the length of the loan is longer than the lifetime of the furniture. However, the loan is practical if you can pay it off early. Modify, the if statement in row 35 to correctly determine if the loan is practical given the assumption that it can be paid off early. To be practical, the monthly loan payment must be less than the new monthly revenue, and the months to pay off the loan early must be less than furniture's lifetime in months. 6 A B D E F G G 1 2 Assumptions Comments Item Values Furniture Loan 3 4 4 $16,000 60 Amount being borrowed to purchased furniture How long the furniture will last before it needs to be replaced Estimate of new monthly revenue yielded from furniture investment 5 $600 6 Furniture's Lifetime (months) New Monthly Revenue Total New Revenue Short-term Investment Rate - $36,000 1.5% 7 Total new revenue yielded from furniture investment Annual interest rate from short-term cash investment 8 9 Loans 10 #1 #2 #3 #4 #5 #6 11 Interest Rate (Annual) 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 12 72 60 48 36 30 24 #of Monthly Payments Monthly Loan Payment 13 14 Total Payments 15 16 Practical 17 18 Regular Payoff 2 #2 19 During Loan Period #1 #3 #4 #5 #6 Actual Monthly Revenue 20 21 Total Revenue 22 Total Gained Including Interest After Loan Paid Off #1 #2 #3 #4 #5 #6 23 24 Months of New Revenue 25 Total Revenue Total Gained Including Interest 26 27 Return on Investment 28 29 Early Payoff #2 # 30 During Loan Period #1 #3 #4 #5 #6 31 Months to Payoff 32 33 Total Payments Months of New Revenue Total Revenue 34 35 Return on Investment 36 Intro Instructions Loan 2 Points 3 1 Loan - Instructions Modify the data in the Loan tab by following the instructions below. To view the instructions and data side-by-side, go to the View menu tab and click New Window. On the View menu tab, click Arrange All and select Tiled. Be sure to follow each step and answer the bolded questions in the space provided to the right. The Loan tab shows your assumptions. You will borrow $16,000 to purchase patio furniture which must be replaced in 5 years (60 months). The current bank saving rate is 1.5%. You believe this new furniture will produce $600 per month in additional revenue. The loan tab shows six possible small business loans. In row 13, calculate the Monthly Loan Payment of each of the loans using an appropriate function. Be sure to use relative and absolute references for the function parameters so you can copy the function across columns B to G. 4 2 Loans #1 #2 7.0% 5 3 6 9 10 11 12 13 14 15 16 Interest Rate (Annual) # of Monthly Payments Monthly Loan Payment Total Payments 8.0% 72 $281 $20,198 60 $317 $19,009 Practical FALSE TRUE 6 4 2 7 5 6 In row 14, calculate the total payment made over the duration of each loan In row 16, determine whether the loan is practical given the assumptions using the appropriate Boolean operator. To be practical, the monthly loan payment must be less than the new monthly revenue, and the number of monthly payments must be less than or equal to the furniture's lifetime in months. If the monthly payment is more than the new revenue, you risk incurring short- term debt. If the furniture needs to be replaced before you can pay off the loan, will have to take out another loan to maintain your outdoor dining area. In row 20, calculate the actual monthly revenue during the loan period. Consider that the loan payment will reduce the new monthly revenue that you expect. 18 19 20 During Loan Period Actual Monthly Revenue Regular Payoff #1 #2 $319 $283 + 12 10 2 13 11 6 14 12 2 In row 25, calculate the total new revenue gained after the loan is paid off. This is a simple formula based on the assumptions and a previously computed value. In row 26, calculate the total amount gained with interest assuming you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table In row 27, calculate the return on investment which is total amount gained with interest during and after the loan. Some of the loans are not feasible (see row 16). Add an IF statement to row 27 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. In row 31, use an appropriate financial formula to calculate how many months to pay off the loan early. By making larger payments each month, the loan can be paid off sooner. Assume you use all the new monthly revenue to pay off the loan, i.e., your loan payment is now equal to the new monthly revenue in the assumptions table. 15 13 5 16 14 5 29 30 31 32 33 34 35 Early Payoff During Loan Period #1 #2 Months to Payoff 29.5 29.1 Total Payments $17,676 $17,441 Months of New Revenue 30.5 30.9 Total Revenue $18,324 $18,559 Return on Investment Not Practical $18,910 17 15 2 In row 32, calculate the total payments made if you paid the loan off early. This is a simple formula based on a previously computed value and the assumption that your loan payment will be equal to the new monthly revenue. Compared to the total payments in row 14, is it advantageous to pay the loan off early? Explain your answer below. 18 16 5 19 In row 33, calculate the number of months of new revenue. This is a simple formula based on the furniture's lifetime and how many months it took to pay off the loan early. 20 17 2 6 4 2 7 5 6 In row 14, calculate the total payment made over the duration of each loan In row 16, determine whether the loan is practical given the assumptions using the appropriate Boolean operator. To be practical, the monthly loan payment must be less than the new monthly revenue, and the number of monthly payments must be less than or equal to the furniture's lifetime in months. If the monthly payment is more than the new revenue, you risk incurring short- term debt. If the furniture needs to be replaced before you can pay off the loan, will have to take out another loan to maintain your outdoor dining area. In row 20, calculate the actual monthly revenue during the loan period. Consider that the loan payment will reduce the new monthly revenue that you expect. 6 2 18 19 20 21 22 23 24 25 26 27 Regular Payoff During Loan Period #1 #2 Actual Monthly Revenue $319 $283 Total Revenue $23,002 $16,991 Total Gained Including Interest $24,053 $17,633 After Loan Paid Off #1 #2 Months of New Revenue -12 0 Total Revenue -$7,200 $0 Total Gained Including Interest -$7,142 $0 Return on Investment Not Practical $17,633 9 7 2 10 8 6 11 9 2 12 10 In row 21, calculate the total revenue during the loan period. This is a simple formula based on the # of months of the loan and a previously computed value. In row 22, calculate the total amount gained with interest assuming you invest the actual monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table. In row 24, calculate months of new revenue after the loan is paid off. This is a simple formula based on the length of the loan in months and the furniture's lifetime in months In row 25, calculate the total new revenue gained after the loan is paid off. This is a simple formula based on the assumptions and a previously computed value. In row 26, calculate the total amount gained with interest assuming you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table In row 27, calculate the return on investment which is total amount gained with interest during and after the loan. Some of the loans are not feasible (see row 16). Add an IF statement to row 27 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. 2 13 11 6 14 12 2 15 13 5 15 In row 32, calculate the total payments made if you paid the loan off early. This is a simple formula based on a previously computed value and the assumption that your loan payment will be equal to the new monthly revenue. Compared to the total payments in row 14, is it advantageous to pay the loan off early? Explain your answer below. 16 In row 33, calculate the number of months of new revenue. This is a simple formula based on the furniture's lifetime and how many months it took to pay off the loan early. 17 18 19 In row 34, calculate the total revenue gained from paying the loan off early. This is a simple formula based on the assumptions and a previously computed value In row 35, calculate the return on investment which assumes you invest the new monthly revenue. Use an appropriate financial function and the short-term investment rate in the assumptions table Some of the loans are not feasible (see row 16). Add an IF statement to row 35 that will return "Not Practical" based on the value of row 16, otherwise compute the return on investment as described above. Among only the practical loans, which one yields the highest return on investment and why? Do you notice a connection between one of the loan parameters and the investment return? Explain. 20 21 22 Notice that paying off a loan early has a bigger impact on loan #2 compared to loan #5 in increasing the return on investment. Why is this the case? Explain below. You should notice that 4 of the loans are no longer practical after you changed your assumptions. Based on these observations and considering that your assumptions might be too generous, what is a good strategy for selecting a loan? Maximizing the return on investment is clearly important, but what else should you considerin picking a loan? Loans #2 #1 #3 #4 #6 26 8.0% 7.0% 5 72 Interest Rate (Annual) # of Monthly Payments Monthly Loan Payment Total Payments 6.0% 48 $376 $18,037 60 $317 $19,009 5.0% 36 $480 $17,263 #5 4.0% 30 $561 $16,840 3.0% 24 $688 $16,505 $281 $20,198 Practical FALSE FALSE TRUE TRUE FALSE FALSE 27 Loans #1 and #2 are not considered practical because the length of the loan is longer than the lifetime of the furniture. However, the loan is practical if you can pay it off early. Modify, the if statement in row 35 to correctly determine if the loan is practical given the assumption that it can be paid off early. To be practical, the monthly loan payment must be less than the new monthly revenue, and the months to pay off the loan early must be less than furniture's lifetime in months. 6