How is Joe doing?
Wednesday, September 21, 2005: Joe has a decision to make.
Sunday, September 25, 2005: Joe decides on the follow course of action.Originally posted by madeinusa
Joe has built his company to 3 trucks and needs a shop. Joe also has $100,000.00 in the bank. The shop will cost Joe $75,000.00 for the size he wants to build.
A. Pay cash for the new building
B. Pay 50% down and mortgage the balance
C. Pay 25% down and mortgage the balance
D. Pay 10% down and mortgage the balance
Which way will be the most "beneficial" to him?
Thursday, September 29, 2005: Joe has now removed all of his money from the bank. He puts $7,500 down for a shop and invests the rest. He secures a loan for $67,500.Originally posted by madeinusa
You put down the least amount as possible, and place the rest in a vehicle which earns you a good interest rate. Sometimes this vehicle will earn you more money than the interest on the loan is costing you, therefore the loan would actually be costing you zero on interest.
Tomorrow is Friday. How will Joe make payroll? Were there enough COD service calls this week to cover this? Next week is a new month. Will accounts receivables come in quick and be enough to cover vendors invoices and loan payments on three trucks and a new building? Whoa is Joe.