Borrowing funds to meet customer requirements and debt

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Reference no: EM1358608

Your assigned project is projected at an estimated order of magnitude to cost $20 million over the course of 5 years. Your organization intends to borrow the entire cost up front to meet customer requirements and pay the debt off over the 5-year life of the project at an interest rate of 10% compounded annually. Including the principle and interest, what is the total cost of your project at the end of the five year life cycle?

Show all work and calculations to include selected formulae.

Based on your calculations what is the minimum estimate that your organization should provide on your proposal to the customer and why is this so?

Reference no: EM1358608

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