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Dean John,
According to Bento, what is the meaning of ” based on the loan amount outstanding at the start of each year”?
Thank you very much.
In addition, how does the condition where “with the exception of the bank overdraft, Bento has provided all the financing to Okazu.” affect the “the valuing net asset” or others?
First question:
It means that the interest charged each year is 8% of what was owing on the load at the start of the year. So the interest charge in the first year is 8% x 30,000 = 2,400.
The interest charge in the second year is 8% x 23,342 (the amount owing at the end of the first year/start of the second year), and so on.Second question:
The net asset valuation of the company as a whole is the value of the total assets less the total current assets. The overdraft is ignored because it is paid off by Bento prior to the sale, and is not transferred to the new company.
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