Reference no: EM133121563

Question - City Band's trustees would like to accommodate both groups of musicians. They have gotten an estimate of $10,000 to make the bandstand accessible. You have lined up a 10-year, $500 per year grant from the State Office of Disabilities and a 5-year, $750 per year grant from the Federal Office of the Aging to help pay for the modifications to the bandstand. In addition, the local chapter of the Knights of Columbus has offered to donate $1,500 toward the project. New City has arranged financing for a potential loan that the City Band trustees can borrow from First United Bank, agreeing to repay the full amount plus interest at a 8 percent rate in 10 annual installments due by December 31st of each year.

Prepare a Summary (by year) Cash Flow budget for the ten years estimated to pay for this project. How much in total will the City Band trustees need to pay the bank (including interest and principal) each year and in total? Will the cash flow be sufficient to pay off the loan in time or will the trustees need to secure additional funding?