questions

You are expected to show your working process and discuss your findings in details.

You need to work on the mini-projects in Excel. Your final mini-project report should be well-organized and typed in a Wordfile. Please submit both your WORD report and Excel files

1: Mortgage Loan Analysis: Mr. Davidson plans to buy a house at Sugar Land in May 2015. The sale price is $566,000. He is going to pay 20% down payments and borrow additional 80% from Bank of America with a 30-year, 3.6% fixed-rate mortgage loan. He is expected to pay an equal MONTHLY payment starting from June 2015 for a total of 30 years.

(1) Calculate the required monthly mortgage payment for Mr. Davidson.

(2) Construct the 2015~2020 amortization table for Mr. Davidson.

(1)  When Mr. Davidson prepares his 2015 tax filing, what is the total mortgage interest payment that he can consider for deduction?

2: Capital Budgeting Analysis: The SL HighTech is planning a new investment project which is expected to yield cash inflows of $385,000 per year in Years 1 through 3, $296,000 per year in Years 4 through 7, and $288,000 in Years 8 through 10.  This investment will cost the company $2,000,000 today (initial outlay). We assume that the firm's cost of capital is 6.5%.

(1)  Draw a time line to show the cash flows of the project.

(2)  Compute the project��s payback period, net present value (NPV), profitability index (PI), internal rate of return (IRR), and modified internal rate of return (MIRR).

(3)  Discuss whether the project should be taken.