Calculate the TEA in dollars requested by JP MORGAN CHASE

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Reference no: EM132975828

Question - The state has signed a contract with the German state for the development of Metro 3 in Lima, whose budget is USD 1,500,000,000.00. The JP Morgan Chase bank offered to participate as one of the creditors and requests that the debt be paid in 7 years at a rate of 14.50% in soles, annually compounded quarterly at increasing installments and a debt-to-capital ratio of 2. The SBS considers that the exchange rate will vary from 3.70 soles to 3.68 Peruvian soles in the next three months and will remain down.

A) Explain your solution strategy.

B) Calculate the TEA in dollars requested by JP MORGAN CHASE. What does this value mean?

C) Present the payment schedule in dollars, consider the payment to be made annually.

In the previous case, to this is added The Bank of America, who requests that it be paid in 7 years at a rate of 15.5% in dollars, annual capitalizable quarterly with constant amortizations and at the same debt-capital ratio requested by JP Morgan.

A) Which bank should I choose? explain and support your answer?

B) From the best option, present the cash flow in annual installments in dollars?

C) Calculate and present the current cash flows of the best option if the inflation is 0.75% semiannual?

Reference no: EM132975828

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