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What is difference between risks return and risk profile

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Develop Understanding of Debt and Consumer Credit

Assume the Abebe industrial engineering engaged in Building Hospital for the COVID 19 the company imports different kinds of construction materials. In the year 2012, the company imports different kinds of construction materials. In the year 2012, the company imported machine at a cost of birr 2,500,000 of which 60% machinery covered by credit facility from dashen bank. The loan will be repaid within 5 years at equal installment monthly at a cost of 12% interest rate. The total service charge and cost related to credit facility is 2000 for the first year and 2500 for the second year of loan period. Assume the bank policy is simple interest rate on outstanding loans and advances.

Problem 1: calculate the principal repayment and cost of loans for the first-year loan period?

Problem 2: calculate the principal repayment and cost of loan for the second-year loan period?

Problem 3: what is the outstanding balance of loan at the end of 3-year loan period?

Problem 4: What is the advantage of credit facilities and Identify investment related opportunities?

Problem 5: what is difference between risks return and risk profile?

Reference no: EM132695510

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