Assignment

: - Develop Understanding of Debt and Consumer Credit

 Assume the Abebe industrial engineering engaged in Building Hospital for

theCOVID19 the company imports different kinds of construction materials. In the

year 2012, thecompany 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 2000for 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.

Task3.1. calculate the principal repayment and cost of loans for the first-year lo

an

period?

Task3.2. calculate the principal repayment and cost of loan for the second-year loan

period?

Task3.3. what is the outstanding balance of loan at the end of 3-year loan period?

Task3.4. What is the advantage of credit facilities and Identify investment related

opportunities?

Task3.5. what is difference between risks return and risk profile.