Reference no: EM131507877
Question: A new 50-room budget motel is being planned. Total cost will be $1,450,000, of which land will be $150,000, building $900,000, furniture and equipment $300,000, and the balance for pre-opening interest and other expenses. The building will be financed 70% by an 8% mortgage for 21 years. The annual payment to amortize (pay back principal and interest) this mortgage will be $63,000. The furniture and equipment will be financed 75% by a mortgage at 11%, repayable in five equal installments of $61,000 principal and interest. Apart from the mortgage and chattel mortgage amounts, the balance of the total investment required will be from equity.
a. Calculate the amount of the equity investment.
b. Prepare the building mortgage repayment schedule for the first five years. Round calculated figures to the nearest $1,000.
c. Prepare the chattel mortgage repayment schedule. Round calculated figures to the nearest $1,000.
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