# Airjet Best Parts, Inc. Part 1

Satisfactory Essays
1131 Words
Grammar
Plagiarism
Writing
Score
Airjet Best Parts, Inc. Part 1
Finance | | | | | | | | | | Course Project - Part 1 - Task 1: Assessing loan options for AirJet Best Parts, Inc. | | | | | | | | | | | | | | | | Question 1: | APR (given) | EAR (calc) | | 2nd ICONV | | | | | | National First | 3.25 + 6.75 = 10% | 10.25 | | NOM = 10% | | | | | | | | | | C/Y = 2 (semiannual) | | | | | | | | | | EFF = 10.2500 | | | | | | | | | | | | | | | | | | | | | | | | | | Regions Best | 13.17 | 13.99 | | 2nd ICONV | | | | | | | | | | NOM = 13.17% | | | | | | | | | | C/Y = 12 (monthly) | | | | | | | | | | EFF = 13.9948 | | | | | | | | | | | | | | | | | | | | | | | | | | Question 2: | | | | | | | | | | I would recommend that AirJet Best Parts, Inc. take the loan that National First is offering since the interest rate is only compounded | | semi-annually, making it lower that that of Regions Best. The loan with National First has an Effective Annual Rate of 10.25, | | | whereas Regions Best 's EAR is calculated at 13.99%. If the loans with Regions Best is taken, AirJet would be paying 3.74% more | | than they would have with National First. | | | | | | | | | | | | | | | | | | | Question 3: | | | | | | | | | | AirJet Best Parts, Inc. Loan with Regions Best | | | | | | | | APR: 8.6% | Term: 5 years | | | | | | | | | Loan Amount \$6,950,000 | | | | | | | | | | | | | | | | | | | N = 60 (12 x 5) | | | | | | | | | | I = .7167 (8.6/12) | | | | | | | | | | PV = \$6,950,000 | | | | | | | | | | PMT = ?? | | | | | | | | | | FV = 0 | | | | | | | | | | | | | | | | | | | | The payment will be \$142,926.43 (rounded) | | | | | | | | | | | | | | | | | | | I think that AirJet Best Parts, Inc. has made a good decision to choose

## You May Also Find These Documents Helpful

• Good Essays

I agree with going with the decision because if you compare it to national First interest rate of 10% even though it is compounded semiannually you still will pay less with Regions First who compounds monthly. The less you can pay in interest over time will be less out of your pocket and the best decision to make in the long run.…

• 1003 Words
• 5 Pages
Good Essays
• Powerful Essays

For the case of GE Capital Canada, Clark Carriers submitted a request for a loan amounting to \$270000. It was first confirmed that Clark Carriers met the minimal requirements set out by the commercial equipment financing division of GE for loans. Cash flow was then analyzed to ensure that Clark Carriers has sufficient cash flow from operations to make payments on current loans. Next the financial ratios were analyzed to ensure that Clark Carriers was efficient in its profitability, liquidity, stability, efficiency and growth in which they proved to achieve positive outcomes in all areas, especially profitability. Preceding that, the projected financial statements of 2003 were created and analyzed to include the new potential loan to display how the new equipment and contract will benefit Clark Carriers financial position. After thorough analyzing of all of these aspects of Clark Carriers, my decision on the matter was that Clark Carriers should be granted the loan from GE Capital Canada and this report should now be submitted to the senior account manager.…

• 2638 Words
• 11 Pages
Powerful Essays
• Powerful Essays

Many small companies use debt financing to achieve financial goals. Some choose to use debt consolidation financing. By having a wide range of financing options available, a company is able to get their business up and running faster. This paper will examine three options of financing for Scott Equipment. The aggressive, moderate, and conservative financing options will be calculated and compared in order to determine the best option for Scott Equipment.…

• 1379 Words
• 6 Pages
Powerful Essays
• Powerful Essays

Tootsie Roll Industries is one of America’s most recognized confectionary companies and has been in business for more than 111 years, manufacturing and selling some of the most popular candies in the world. Tootsie Roll wants to secure a loan that will help increase the company’s total liabilities by 10% in the tune of \$2.5 million. This loan package is attached to an updated business plan that provides the lender with the company’s history, a vision statement, its market, products, services, management, how the loan will impact the business, and the method of repayment. This paper will detail different ratio analyses, loan justification, and how the company plans to use the proceeds.…

• 1628 Words
• 7 Pages
Powerful Essays
• Satisfactory Essays

If i was borrowing money and paying interest i would prefer that the interest rate was annually. Annually means yearly which means i would only have to pay interest that one time. It might be an expensive amount of money to come up with but at least it’s paid off and you no longer have to deal with it.…

• 1780 Words
• 7 Pages
Satisfactory Essays
• Satisfactory Essays

Since the 1940’s TMS has been providing small loans to consumers. During that time TMS augmented its business to include the servicing of business loans, business acquisition financing, and commercial real estate loans. In 1946 TMS decided to finance forestry and construction equipment. The decision proved to be very profitable and resulted in TMS’s establishment of Future Growth Inc. (FGI). Consequently FGI also experienced an immense demand for equipment allowing FGI the capability to purchase its own equipment manufacturing company. This allowed FGI to sell, build, and finance its own equipment. For 67 years FGI’s business venture went well (UOP, 2010).…

• 720 Words
• 3 Pages
Satisfactory Essays
• Powerful Essays

Jones Electrical Distribution (“JED”), which sells electrical components and tools to general contractors and electricians, is experiencing rapid growth in a highly-fragmented, highly competitive industry and despite profits, experiencing a cash shortfall, resulting in increased borrowing from Metropolitan Bank (the “Bank”) to \$250K, the max loan amount the Bank will make to any one client. JED has been able to remain within this amount through 2006, relying heavily on trade credit from suppliers. As a result, Nelson Jones, owner and president, is seeking a new banking relationship. Nelson’s friend introduced him to a new bank where he felt he might qualify for a loan up to \$350K. The new loan would provide him with the much need credit availability now, but carry customary covenants causing JED to be more deliberate about future growth: (i) continue on aggressive growth path; or (ii) moderate/slow.…

• 1029 Words
• 5 Pages
Powerful Essays
• Good Essays

As a result of the cash flow problems, the owner of the company in each of the cases requested a loan from the bank in order to support the continued operations of his business. However, the reasoning behind the requested funding and the risks and returns associated with its fulfillment varied in each of the cases examined. For Wilson Lumber, the company was experiencing rapid growth and the nature of the business (long cash cycles and low profit margins) necessitated that Mr. Wilson secure outside funding to finance its growth. Wilson Lumber is an established business with 10 years of profitable returns in a non-seasonal industry that has little volatility in sales and is relatively unaffected by swings in the economic state of the nation. These characteristics differentiate Wilson Lumber from the other cases discussed and impact the options available to Mr. Wilson in terms of outside funding. Mr. Wilson had previously been relying on extended trade credits as a means of financing. However, by extending the life of the trade credits, Mr. Wilson was not only increasing his cash cycle but also running the risk of financing his payables at a much higher rate than obtaining a bank loan. Mr. Wilson was therefore left to decide how to finance his growing company, something his narrow profit margins left him unable…

• 1384 Words
• 6 Pages
Good Essays
• Satisfactory Essays

This paper evaluated the creditworthiness of Advance Medical Technology Corporation (AMT) to determine whether Western National Bank (WNB) should approve the \$8M loan request of the former. AMT was assessed based on their credit history, financial statements for the past three years (1983- 1985), availability of loan collaterals, and an income statement forecast for the succeeding year.…

• 3895 Words
• 20 Pages
Satisfactory Essays
• Satisfactory Essays

Part I – In Part I, you work with AirJet Best Parts, Inc. staff to identify the best loan options, as well as to valuate stocks and bonds.…

• 486 Words
• 3 Pages
Satisfactory Essays
• Best Essays

This report entails a loan structure for Air Asia Berhad, a low-cost airline service provider based in Malaysia (listed in the Bursa Malaysia) who aims to increase its annual sales by thirty percent and has approached the banking sector for a working capital loan of RM 10 million (tenure of five years). The bank would take its financial and non-financial standings into consideration and make an evaluation based on the five main credit evaluation criteria; mainly focusing on – capital, capacity, collateral, condition and compliance. The financial performance of the company over the past 3 years will also be assessed using audited financial statements. Moreover, both judgmental and financial ratio analysis approaches are applied to arrive at a conclusive decision.…

• 4357 Words
• 18 Pages
Best Essays
• Better Essays

Today if we are talking about computer security there are different terminologies that contribute in making the outline of computer security. It is the combination of different processes and mechanism by which important and sensitive information are secluded from publication and tampering by unauthorized persons. The major focus of computer security is to protect information and critical data from unauthorized usage. Computer security has deep roots in Information technology industry. Security in IT can be defined as a branch of computer science which is related to control of different kinds of risks associated with critical data. This can be done only if the authorized person dealing with the system network or administration secures this information with good software and servers which are designed to work heavily.…

• 1396 Words
• 5 Pages
Better Essays
• Better Essays

Weaknesses are a symptom that is prevalent in today’s information technology realm, indicating vulnerabilities and risks that come hand and hand with shared networks like Aircraft Solutions. With enterprises exchanging an unprecedented level of information over open networks, the vulnerabilities and possibility of compromised security by unwanted intruders is swelling up into a new type of beast.…

• 1105 Words
• 5 Pages
Better Essays
• Good Essays

From the point of view as the bank creditor, Jerry Eckwood, a determination must be made of whether Hampton Machine Tool Company should receive an extension of their original loan of \$1 million, as well as an additional loan of \$350,000. After research and careful consideration and extraneous research and forecasting, we, St. Louis National Bank, as well as myself, Jerry Eckwood, have determined to reject Hampton Machine Tool Company’s loan request, as well as the loan extension request. Based off of conducting a financial analysis, primarily on the cash budget, our forecasting has shown that Hampton Machine Tool Company would not be able to fully repay their loan of \$1.35 million by the end of the year (1979).…

• 1103 Words
• 10 Pages
Good Essays
• Powerful Essays

• JetBlue was the best-funded start-up in U.S. aviation history, founded in early 1999 with an initial capitalization of \$130 million.…

• 3712 Words
• 15 Pages
Powerful Essays