DECISION TREE ANALYSIS

1
Situation:
A company named “Renaissance Ltd” belong
to the manufacturing industry which is into
producing fans of every type.

As they have received a new order from the

hospitality industry and 35% of advance
payment will be done after 6 months and the
remaining 65% after completion of the order,
Renaissance Ltd plans to set up a new unit for
that, and for that, they want to take a debt of
10 crores from the bank.

So they have 4 alternatives available:

2
 Alternatives:
1) To take a debt of complete 10 crores from the Bank of Maharashtra @ 13% per annum
and repayment will be done in 2 years, there were two conditions in that a) without the
moratorium and b)with the moratorium of 1 year.

2) To take a debt of complete 10 crores from the Indian Bank @ 11.5% per annum and
repayment will be done in 3 years, there were two conditions in that a) without the
moratorium and b)with the moratorium of 1 year.

3) To take a debt of 7.5 crores from Vivriti Capital Ltd (Non-banking Financial Institution)
@ 9.5% per annum and repayment will be done in 2 years and the remaining 2.5 crores
from Union Bank of India @ 12.5% per annum and repayment will be done in 1 year
without any moratorium.

4) As Renaissance Ltd had a plan of going public after 2 years so coming up with an IPO is
also an option to get the funds, IPO size - 250 crores.
3
Working on Alternative 1 without Moratorium
To take a debt of complete 10 crores from the Bank of Maharashtra @ 13% per annum and repayment will be done in 2 years,
there were two conditions in that a) without the moratorium.

Month Amount/balance EMI Interest Principal Balance

0         10,00,00,000
1 10,00,00,000 ₹ 47,54,182.26 10,83,333.33 ₹ 36,70,848.93 9,63,29,151.07
2 9,63,29,151.07 ₹ 47,54,182.26 10,43,565.80 ₹ 37,10,616.46 9,26,18,534.62
3 9,26,18,535 ₹ 47,54,182.26 10,03,367.46 ₹ 37,50,814.80 8,88,67,719.82
4 8,88,67,719.82 ₹ 47,54,182.26 9,62,733.63 ₹ 37,91,448.63 8,50,76,271.19
5 8,50,76,271 ₹ 47,54,182.26 9,21,659.60 ₹ 38,32,522.65 8,12,43,748.54
6 8,12,43,748.54 ₹ 47,54,182.26 8,80,140.61 ₹ 38,74,041.65 7,73,69,706.89
7 7,73,69,707 ₹ 47,54,182.26 8,38,171.82 ₹ 39,16,010.43 7,34,53,696.45
8 7,34,53,696.45 ₹ 47,54,182.26 7,95,748.38 ₹ 39,58,433.88 6,94,95,262.57
9 6,94,95,263 ₹ 47,54,182.26 7,52,865.34 ₹ 40,01,316.91 6,54,93,945.66
10 6,54,93,945.66 ₹ 47,54,182.26 7,09,517.74 ₹ 40,44,664.51 6,14,49,281.14
11 6,14,49,281 ₹ 47,54,182.26 6,65,700.55 ₹ 40,88,481.71 5,73,60,799.43
12 5,73,60,799.43 ₹ 47,54,182.26 6,21,408.66 ₹ 41,32,773.60 5,32,28,025.83
13 5,32,28,026 ₹ 47,54,182.26 5,76,636.95 ₹ 41,77,545.31 4,90,50,480.52
14 4,90,50,480.52 ₹ 47,54,182.26 5,31,380.21 ₹ 42,22,802.05 4,48,27,678.47
15 4,48,27,678 ₹ 47,54,182.26 4,85,633.18 ₹ 42,68,549.08 4,05,59,129.39
16 4,05,59,129.39 ₹ 47,54,182.26 4,39,390.57 ₹ 43,14,791.69 3,62,44,337.70
17 3,62,44,338 ₹ 47,54,182.26 3,92,646.99 ₹ 43,61,535.27 3,18,82,802.43
18 3,18,82,802.43 ₹ 47,54,182.26 3,45,397.03 ₹ 44,08,785.23 2,74,74,017.20
19 2,74,74,017 ₹ 47,54,182.26 2,97,635.19 ₹ 44,56,547.07 2,30,17,470.13
20 2,30,17,470.13 ₹ 47,54,182.26 2,49,355.93 ₹ 45,04,826.33 1,85,12,643.80
21 1,85,12,644 ₹ 47,54,182.26 2,00,553.64 ₹ 45,53,628.62 1,39,59,015.18
22 1,39,59,015.18 ₹ 47,54,182.26 1,51,222.66 ₹ 46,02,959.59 93,56,055.58
23 93,56,056 ₹ 47,54,182.26 1,01,357.27 ₹ 46,52,824.99 47,03,230.59
24 47,03,230.59 ₹ 47,54,182.26 50,951.66 ₹ 47,03,230.59 0.00 4
Working on Alternative 1 with Moratorium
To take a debt of complete 10 crores from the Bank of Maharashtra @ 13% per annum and repayment will be done in 2 years,
there were two conditions in that b)with the moratorium of 1 year.
Month Amount/balance EMI Interest Principal Balance
0 10,00,00,000.00
1 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
2 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
3 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
4 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
5 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
6 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
7 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
8 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
9 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
10 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
11 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
12 10,00,00,000.00 - 10,83,333.33 - 10,00,00,000.00
13 10,00,00,000.00 ₹ 89,31,727.57 10,83,333.33 ₹ 78,48,394.24 9,21,51,605.76
14 9,21,51,605.76 ₹ 89,31,727.57 9,98,309.06 ₹ 79,33,418.51 8,42,18,187.25
15 8,42,18,187.25 ₹ 89,31,727.57 9,12,363.70 ₹ 80,19,363.88 7,61,98,823.38
16 7,61,98,823.38 ₹ 89,31,727.57 8,25,487.25 ₹ 81,06,240.32 6,80,92,583.06
17 6,80,92,583.06 ₹ 89,31,727.57 7,37,669.65 ₹ 81,94,057.92 5,98,98,525.14
18 5,98,98,525.14 ₹ 89,31,727.57 6,48,900.69 ₹ 82,82,826.88 5,16,15,698.26
19 5,16,15,698.26 ₹ 89,31,727.57 5,59,170.06 ₹ 83,72,557.51 4,32,43,140.75
20 4,32,43,140.75 ₹ 89,31,727.57 4,68,467.36 ₹ 84,63,260.21 3,47,79,880.54
21 3,47,79,880.54 ₹ 89,31,727.57 3,76,782.04 ₹ 85,54,945.53 2,62,24,935.00
22 2,62,24,935.00 ₹ 89,31,727.57 2,84,103.46 ₹ 86,47,624.11 1,75,77,310.90
23 1,75,77,310.90 ₹ 89,31,727.57 1,90,420.87 ₹ 87,41,306.70 88,36,004.19
24 88,36,004.19 ₹ 89,31,727.57 95,723.38 ₹ 88,36,004.19 -
5
Working on Alternative 2 without Moratorium
To take a debt of complete 10 crores from the Indian Bank @ 11.5% per annum and repayment will be done in 3 years, there
were two conditions in that a) without the moratorium.
Month Amount/balance EMI Interest Principal Balance
0         10,00,00,000
1 10,00,00,000 ₹ 32,97,600.64 9,58,333.33 ₹ 23,39,267.31 9,76,60,732.69
2 9,76,60,732.69 ₹ 32,97,600.64 9,35,915.35 ₹ 23,61,685.29 9,52,99,047.40
3 9,52,99,047 ₹ 32,97,600.64 9,13,282.54 ₹ 23,84,318.11 9,29,14,729.30
4 9,29,14,729.30 ₹ 32,97,600.64 8,90,432.82 ₹ 24,07,167.82 9,05,07,561.48
5 9,05,07,561 ₹ 32,97,600.64 8,67,364.13 ₹ 24,30,236.51 8,80,77,324.96
6 8,80,77,324.96 ₹ 32,97,600.64 8,44,074.36 ₹ 24,53,526.28 8,56,23,798.68
7 8,56,23,799 ₹ 32,97,600.64 8,20,561.40 ₹ 24,77,039.24 8,31,46,759.44
8 8,31,46,759.44 ₹ 32,97,600.64 7,96,823.11 ₹ 25,00,777.53 8,06,45,981.91
9 8,06,45,982 ₹ 32,97,600.64 7,72,857.33 ₹ 25,24,743.32 7,81,21,238.60
10 7,81,21,238.60 ₹ 32,97,600.64 7,48,661.87 ₹ 25,48,938.77 7,55,72,299.82
11 7,55,72,300 ₹ 32,97,600.64 7,24,234.54 ₹ 25,73,366.10 7,29,98,933.72
12 7,29,98,933.72 ₹ 32,97,600.64 6,99,573.11 ₹ 25,98,027.53 7,04,00,906.19
13 7,04,00,906 ₹ 32,97,600.64 6,74,675.35 ₹ 26,22,925.29 6,77,77,980.90
14 6,77,77,980.90 ₹ 32,97,600.64 6,49,538.98 ₹ 26,48,061.66 6,51,29,919.24
15 6,51,29,919 ₹ 32,97,600.64 6,24,161.73 ₹ 26,73,438.92 6,24,56,480.32
16 6,24,56,480.32 ₹ 32,97,600.64 5,98,541.27 ₹ 26,99,059.37 5,97,57,420.95
17 5,97,57,421 ₹ 32,97,600.64 5,72,675.28 ₹ 27,24,925.36 5,70,32,495.59
18 5,70,32,495.59 ₹ 32,97,600.64 5,46,561.42 ₹ 27,51,039.23 5,42,81,456.36
19 5,42,81,456 ₹ 32,97,600.64 5,20,197.29 ₹ 27,77,403.35 5,15,04,053.01
20 5,15,04,053.01 ₹ 32,97,600.64 4,93,580.51 ₹ 28,04,020.14 4,87,00,032.87
21 4,87,00,033 ₹ 32,97,600.64 4,66,708.65 ₹ 28,30,891.99 4,58,69,140.88
22 4,58,69,140.88 ₹ 32,97,600.64 4,39,579.27 ₹ 28,58,021.38 4,30,11,119.50
23 4,30,11,120 ₹ 32,97,600.64 4,12,189.90 ₹ 28,85,410.75 4,01,25,708.75
24 4,01,25,708.75 ₹ 32,97,600.64 3,84,538.04 ₹ 29,13,062.60 3,72,12,646.15
25 3,72,12,646.15 ₹ 32,97,600.64 3,56,621.19 ₹ 29,40,979.45 3,42,71,666.70
26 3,42,71,666.70 ₹ 32,97,600.64 3,28,436.81 ₹ 29,69,163.84 3,13,02,502.86
27 3,13,02,502.86 ₹ 32,97,600.64 2,99,982.32 ₹ 29,97,618.32 2,83,04,884.54
28 2,83,04,884.54 ₹ 32,97,600.64 2,71,255.14 ₹ 30,26,345.50 2,52,78,539.04
29 2,52,78,539.04 ₹ 32,97,600.64 2,42,252.67 ₹ 30,55,347.98 2,22,23,191.06
30 2,22,23,191.06 ₹ 32,97,600.64 2,12,972.25 ₹ 30,84,628.40 1,91,38,562.67
31 1,91,38,562.67 ₹ 32,97,600.64 1,83,411.23 ₹ 31,14,189.42 1,60,24,373.25
32 1,60,24,373.25 ₹ 32,97,600.64 1,53,566.91 ₹ 31,44,033.73 1,28,80,339.52
33 1,28,80,339.52 ₹ 32,97,600.64 1,23,436.59 ₹ 31,74,164.06 97,06,175.46
34 97,06,175.46 ₹ 32,97,600.64 93,017.51 ₹ 32,04,583.13 65,01,592.33
35 65,01,592.33 ₹ 32,97,600.64 62,306.93 ₹ 32,35,293.72 32,66,298.61
36 32,66,298.61 ₹ 32,97,600.64 31,302.03 ₹ 32,66,298.61 -0.00
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Working on Alternative 2 with Moratorium
To take a debt of complete 10 crores from the Indian Bank @ 11.5% per annum and repayment will be done in 3 years,
there were two conditions in that b)with the moratorium of 1 year.
Month Amount/balance EMI Interest Principal Balance
0 10,00,00,000.00
1 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
2 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
3 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
4 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
5 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
6 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
7 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
8 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
9 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
10 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
11 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
12 10,00,00,000.00 - 9,58,333.33 - 10,00,00,000.00
13 10,00,00,000.00 ₹ 46,84,031.53 9,58,333.33 ₹ 37,25,698.20 9,62,74,301.80
14 9,62,74,301.80 ₹ 46,84,031.53 9,22,628.73 ₹ 37,61,402.80 9,25,12,899.00
15 9,25,12,899.00 ₹ 46,84,031.53 8,86,581.95 ₹ 37,97,449.58 8,87,15,449.42
16 8,87,15,449.42 ₹ 46,84,031.53 8,50,189.72 ₹ 38,33,841.81 8,48,81,607.61
17 8,48,81,607.61 ₹ 46,84,031.53 8,13,448.74 ₹ 38,70,582.79 8,10,11,024.82
18 8,10,11,024.82 ₹ 46,84,031.53 7,76,355.65 ₹ 39,07,675.88 7,71,03,348.95
19 7,71,03,348.95 ₹ 46,84,031.53 7,38,907.09 ₹ 39,45,124.44 7,31,58,224.51
20 7,31,58,224.51 ₹ 46,84,031.53 7,01,099.65 ₹ 39,82,931.88 6,91,75,292.63
21 6,91,75,292.63 ₹ 46,84,031.53 6,62,929.89 ₹ 40,21,101.64 6,51,54,190.99
22 6,51,54,190.99 ₹ 46,84,031.53 6,24,394.33 ₹ 40,59,637.20 6,10,94,553.79
23 6,10,94,553.79 ₹ 46,84,031.53 5,85,489.47 ₹ 40,98,542.06 5,69,96,011.73
24 5,69,96,011.73 ₹ 46,84,031.53 5,46,211.78 ₹ 41,37,819.75 5,28,58,191.98
25 5,28,58,191.98 ₹ 46,84,031.53 5,06,557.67 ₹ 41,77,473.86 4,86,80,718.13
26 4,86,80,718.13 ₹ 46,84,031.53 4,66,523.55 ₹ 42,17,507.98 4,44,63,210.15
27 4,44,63,210.15 ₹ 46,84,031.53 4,26,105.76 ₹ 42,57,925.77 4,02,05,284.38
28 4,02,05,284.38 ₹ 46,84,031.53 3,85,300.64 ₹ 42,98,730.89 3,59,06,553.49
29 3,59,06,553.49 ₹ 46,84,031.53 3,44,104.47 ₹ 43,39,927.06 3,15,66,626.43
30 3,15,66,626.43 ₹ 46,84,031.53 3,02,513.50 ₹ 43,81,518.03 2,71,85,108.41
31 2,71,85,108.41 ₹ 46,84,031.53 2,60,523.96 ₹ 44,23,507.57 2,27,61,600.83
32 2,27,61,600.83 ₹ 46,84,031.53 2,18,132.01 ₹ 44,65,899.52 1,82,95,701.31
33 1,82,95,701.31 ₹ 46,84,031.53 1,75,333.80 ₹ 45,08,697.73 1,37,87,003.58
34 1,37,87,003.58 ₹ 46,84,031.53 1,32,125.45 ₹ 45,51,906.08 92,35,097.51
35 92,35,097.51 ₹ 46,84,031.53 88,503.02 ₹ 45,95,528.51 46,39,568.99
7
36 46,39,568.99 ₹ 46,84,031.53 44,462.54 ₹ 46,39,568.99 -0.00
Working on Alternative 3
To take a debt of 7.5 crores from Vivriti Capital Ltd (Non-banking Financial Institution) @ 9.5% per annum and repayment will be done in 2
years and the remaining 2.5 crores from Union Bank of India @ 12.5% per annum and repayment will be done in 1 year without any
moratorium.
VIVRITI CAPITAL LTD (NBFC) UNION BANK OF INDIA
Month Amount/balance EMI Interest Principal Balance Month Amount/balance EMI Interest Principal Balance
0         7,50,00,000 0         2,50,00,000
1 7,50,00,000 ₹ 34,43,586.97 5,93,750.00 ₹ 28,49,836.97 7,21,50,163.03
1 2,50,00,000 ₹ 22,27,071.57 2,60,416.67 ₹ 19,66,654.90 2,30,33,345.10
2 7,21,50,163.03 ₹ 34,43,586.97 5,71,188.79 ₹ 28,72,398.18 6,92,77,764.84
3 6,92,77,765 ₹ 34,43,586.97 5,48,448.97 ₹ 28,95,138.00 6,63,82,626.84 2 2,30,33,345.10 ₹ 22,27,071.57 2,39,930.68 ₹ 19,87,140.89 2,10,46,204.21
4 6,63,82,626.84 ₹ 34,43,586.97 5,25,529.13 ₹ 29,18,057.85 6,34,64,568.99 3 2,10,46,204 ₹ 22,27,071.57 2,19,231.29 ₹ 20,07,840.27 1,90,38,363.94
5 6,34,64,569 ₹ 34,43,586.97 5,02,427.84 ₹ 29,41,159.14 6,05,23,409.86 4 1,90,38,363.94 ₹ 22,27,071.57 1,98,316.29 ₹ 20,28,755.28 1,70,09,608.66
6 6,05,23,409.86 ₹ 34,43,586.97 4,79,143.66 ₹ 29,64,443.31 5,75,58,966.55 5 1,70,09,609 ₹ 22,27,071.57 1,77,183.42 ₹ 20,49,888.14 1,49,59,720.51
7 5,75,58,967 ₹ 34,43,586.97 4,55,675.15 ₹ 29,87,911.82 5,45,71,054.72
6 1,49,59,720.51 ₹ 22,27,071.57 1,55,830.42 ₹ 20,71,241.15 1,28,88,479.37
8 5,45,71,054.72 ₹ 34,43,586.97 4,32,020.85 ₹ 30,11,566.12 5,15,59,488.60
9 5,15,59,489 ₹ 34,43,586.97 4,08,179.28 ₹ 30,35,407.69 4,85,24,080.91 7 1,28,88,479 ₹ 22,27,071.57 1,34,254.99 ₹ 20,92,816.57 1,07,95,662.79
10 4,85,24,080.91 ₹ 34,43,586.97 3,84,148.97 ₹ 30,59,438.00 4,54,64,642.91 8 1,07,95,662.79 ₹ 22,27,071.57 1,12,454.82 ₹ 21,14,616.75 86,81,046.05
11 4,54,64,643 ₹ 34,43,586.97 3,59,928.42 ₹ 30,83,658.55 4,23,80,984.36 9 86,81,046 ₹ 22,27,071.57 90,427.56 ₹ 21,36,644.00 65,44,402.04
12 4,23,80,984.36 ₹ 34,43,586.97 3,35,516.13 ₹ 31,08,070.85 3,92,72,913.51 10 65,44,402.04 ₹ 22,27,071.57 68,170.85 ₹ 21,58,900.71 43,85,501.33
13 3,92,72,914 ₹ 34,43,586.97 3,10,910.57 ₹ 31,32,676.41 3,61,40,237.10
11 43,85,501 ₹ 22,27,071.57 45,682.31 ₹ 21,81,389.26 22,04,112.07
14 3,61,40,237.10 ₹ 34,43,586.97 2,86,110.21 ₹ 31,57,476.76 3,29,82,760.34
15 3,29,82,760 ₹ 34,43,586.97 2,61,113.52 ₹ 31,82,473.45 2,98,00,286.88 12 22,04,112.07 ₹ 22,27,071.57 22,959.50 ₹ 22,04,112.07 -0.00
16 2,98,00,286.88 ₹ 34,43,586.97 2,35,918.94 ₹ 32,07,668.04 2,65,92,618.85
17 2,65,92,619 ₹ 34,43,586.97 2,10,524.90 ₹ 32,33,062.07 2,33,59,556.77
18 2,33,59,556.77 ₹ 34,43,586.97 1,84,929.82 ₹ 32,58,657.15 2,01,00,899.62
19 2,01,00,900 ₹ 34,43,586.97 1,59,132.12 ₹ 32,84,454.85 1,68,16,444.77
20 1,68,16,444.77 ₹ 34,43,586.97 1,33,130.19 ₹ 33,10,456.79 1,35,05,987.98
21 1,35,05,988 ₹ 34,43,586.97 1,06,922.40 ₹ 33,36,664.57 1,01,69,323.41
22 1,01,69,323.41 ₹ 34,43,586.97 80,507.14 ₹ 33,63,079.83 68,06,243.58
23 68,06,244 ₹ 34,43,586.97 53,882.76 ₹ 33,89,704.21 34,16,539.37
24 34,16,539.37 ₹ 34,43,586.97 27,047.60 ₹ 34,16,539.37 -
8
Working on Alternative 4

To complete an order of 10 crores going public that is INITIAL

PUBLIC OFFERING is not a good idea as they have made the
statement clear that they will go public after 2 years.

9
THE DECISION TREE ANALYSIS Amount to be Paid
Without Moratorium: 48 Lakhs every month for 2 Years

1
With Moratorium: 10 Lakhs every month for 1 Year and 90
Lakhs every month for next year

Without Moratorium: 32 Lakhs every month for 3 Years

2
New With Moratorium: 9 Lakhs every month for 1 Year and 45
Unit Lakhs every month for the next 2 years

3
57 Lakhs every month for 1 Year and 34 Lakhs every
month for the next 2 years

4 Going Public for 10 crores is not a correct option

It’s the unnecessary raising of 240 crores
10
Presented by –
Jay Darji A-11
Aditya Dawda A-12
Abhijeet Deshmukh A-13
Mukul Deshmukh A-14
Shawwal Deshmukh A-15

THANK YOU
11