【正文】 ayments in the remaining (nc) periods discounted at the borrowing rate i to t = c as follows:()For coupon bonds, the required repayment Rc after the redemption of the coupon at the end of period c is simply the original borrowed amount Q. For uniform payment bonds, the required repayment Rc after the last payment at the end of period c is:()Many types of bonds can be traded in a secondary market by the bond holder. As interest rates fluctuate over time, bonds will gain or lose in value. The actual value of a bond is reflected in the market discount or premium paid relative to the original principal amount (the face value). Another indicator of this value is the yield to maturity or internal rate of return of the bond. This yield is calculated by finding the interest rate that sets the (discounted) future cash flow of the bond equal to the current market price:()where Vc is the current market value after c periods have lapsed since the issuance of the bond, is the bond cash flow in period t, and r is the market yield. Since all the bond cash flows are positive after the initial issuance, only one value of the yield to maturity will result from Eq. (). Several other factors e into play in evaluation of bond values from the lenders point of view, however. First, the lender must adjust for the possibility that the borrower may default on required interest and principal payments. In the case of publicly traded bonds, special rating panies divide bonds into different categories of risk for just this purpose. Obviously, bonds that are more likely to default will have a lower value. Secondly, lenders will typically make adjustments to account for changes in the tax code affecting their aftertax return from a bond. Finally, expectations of future inflation or deflation as well as exchange rates will influence market values. Another mon feature in borrowing agreements is to have a variable interest rate. In this case, interest payments would vary with the overall market interest rate in some prespecified f。 Borrowing from a local bank at an interest rate of % with uniform annual payments over twenty years to pay for the construction costs. The shortfalls for repayments on loans will e from corporate earnings. An origination fee of % of the original loan is required to cover engineer39。 Initiate a Joint Venture with Local Government: In many areas, local governments will help local panies with major new ventures such as a new headquarters. This help might include assistance in assembling property, low interest loans or proerty tax reductions. In the extreme, local governments may force sale of land through their power of eminent domain to assemble necessary plots. Evaluation of Alternative Financing PlansSince there are numerous different sources and arrangements for obtaining the funds necessary for facility construction, owners and other project participants require some mechanism for evaluating the different potential sources. The relative costs of different financing plans are certainly important in this regard. In addition, the flexibility of the plan and availability of reserves may be critical. As a project manager, it is important to assure adequate financing to plete a project. Alternative financing plans can be evaluated using the same techniques that are employed for the evaluation of investment alternatives. As described in Chapter 6, the availability of different financing plans can affect the selection of alternative projects. A general approach for obtaining the bined effects of operating and financing cash flows of a project is to determine the adjusted net present value (APV) which is the sum of the net present value of the operating cash flow (NPV) and the net present value of the financial cash flow (FPV), discounted at their respective minimum attractive rates of return (MARR), .,()where r is the MARR reflecting the risk of the operating cash flow and rf is the MARR representing the cost of borrowing for the financial cash flow. Thus,()where At and are respectively the operating and financial cash flows in period t. For the sake of simplicity, we shall emphasize in this chapter the evaluation of financing plans, with occasional references to the bined effects of operating and financing cash flows. In all discussions, we shall present various financing schemes with examples limiting to cases of beforetax cash flows discounted at a beforetax MARR of r = rf for both operating and financial cash flows. Once the basic concepts of various financing schemes are clearly understood, their application to more plicated situations involving depreciation, tax liability and risk factors can be considered in bination with the principles for dealing with such topics enunciated in Chapter 6. In this section, we shall concentrate on the putational techniques associated with the most mon types of financing arrangements. More detailed descriptions of various financing schemes and the parisons of their advantages and disadvantages will be discussed in later sections. Typically, the interest rate for borrowing is stated in terms of annual percentage rate (.), but the interest is accrued according to the rate for the interest period specified in the borrowing agreement. Let ip be the nominal annual percentage rate, and i be the interest rate for each of the p interest periods per year. By definition()If interest is accrued semiannually, ., p = 2, the interest rate per period is ip/2。Weeks 2326Example 71: Example of financing optionsSuppose that you represent a private corporation attempting to arrange financing for a new headquarters building. These are several options that might be considered: Weeks 220 7. Financing of Constructed Facilities The Financing ProblemInvestment in a constructed facility represents a cost in the short term that returns benefits only over the long term use of the facility. Thus, costs occu