Would the company able to pay back the loan in five years

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Assume a July to June 12-month period, prepare a cash budget for the first year, by month and annual. Assume that the capital investments and other start-up costs would incur in the first month - July. Also assume that the loan would be received in July. All sales are cash sales. All purchases would be paid in the month of purchase. The company would like to make monthly payment (at the end of each month) for the loan starting in August.

Problem 1: Based on the cash budget, would the company able to pay back the loan in 5 years?

Reference no: EM132790889

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