Bachelor

Taking in consideration the positive changes in the investment funds climate, P& angstrom unit;G Mexico immovable to increase its manufacturing competency to meet the needs of the growing work ,by making a radical capital investment of virtually 150 cardinal in three divisions. The main alternatives for pay this investment ar dissectd below. The approach of debt financing is influenced by interest run, ostentatiousness and assesses. We will give a numeric value of the in a higher place factors and analyze how they differ from integrity financing alternative to another. The alternatives goat be divided into two main groups: loans interpreted in US dollars and loans taken in Mexican pesos. The discount rate utilize is the angleed comely follow of capital. As we move intot necessitate the weight and cost of equity and the weight of debt we as eyee that the leaden cost of capital is 6% for the loans taken in US dollars and 14% for the loans in Mexican pesos. Th e number 1 acknowledgment of financing is winning a loan in US dollars, with the approval, but not active participation of P& international adenylic acidere;G. The interest rate for this loan is fixed and would number 12% for the three forms period. The average amount of debt is 20 gazillion in the first year, 55 jillions in the present moment year and 90 in the third year.

The devaluation effect, is calculated by multiplying the average debt taken with the forecasted devaluation and with 80% (because only 80% of the total sum is needed in Mexican pesos.) From the devaluation effect, each year has been exclu ded 20% of the average sum needed. Inflation! ary component tax differs from one year to another, according to the change in the take localise of inflation. For the exact values see table 1. The total cost of this kind of debt is 19,0265 millions US dollar. Total interest expenses are 19,8 million US dollars, while the depreciation cost and inflationary cost are 5,828 and 7,749 million dollars each. The second source of financing is pickings a US dollars loan with the guarantee of P&G. In this case the interest rates would be 7%...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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