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Bakery Expansion and Loan Strategies

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Kaeser0422
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16 views3 pages

Bakery Expansion and Loan Strategies

Uploaded by

Kaeser0422
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

PROBLEM

Bernard and Kaesser are coowners of a successful bakery known as "Sweet Delights."
Bernard and Kaesser are determined to expand their business by establishing another
location in a downtown commercial area. A serious investment, however is needed for
this.
Business Loan
Bernard and Kaesser decide to take out business money to finance rent and initial
inventory for the new location, as well as equipment. Bernard and Kaesser present their
detailed business plan to the local bank; the plan details what they will earn and spend.
The bank accepts their $100,000 loan with interest of 5 percent annually to be repaid after
5 years.
Consumer Loan
Kaesser has a cash-flow problem. He needs to transport his ingredients around, and his
car nearly broke down. He prefers to buy a new car but cannot save enough amount of
money for the whole sum. Therefore, he decides to borrow a loan that will finance half of
a used car. He accepts a $20 000 bank loan carrying an in-built interest of 8% pa. He
stretches the payment period to 3 years.

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