What advice will you give to mr. jojo waen

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Question: Mr. Jojo Waen is contemplating on expanding his business by acquiring new building at Pangasinan where he will operate his business. As such, he would be needing at least 100 Million to put everything in place. However, he found out that currently, he only have 35 Million in bank. He is thinking of borrowing the remaining amount from Banco Pag-asa which charges 8% per annum on loans. Upon analysis, he found out that there is higher tendency that new building will allow him to realize at least 2 million profit per annum. As his financial officer, what advice will you give to Mr. Jojo Waen? Prove you answer by showing your complete solution using the data provided in the problem and explain whether or not it is advantageous for him to borrow using financial concepts that you have learned from our discussion.

Reference no: EM133264603

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