JPM Investment Banking Interview Question
"How does a financing fee of $10M amortized over 5 years affect the three financial statements?" I understand everything but the debt portion. Besides being used to balance the Balance Sheet, why is debt going down by 8 in year 1 and consistently increasing by 2 for the remaining four?
Interest: Year 1: ($2m) Year 2: ($2m) Year 3: ($2m) Year 4: ($2m) Year 5: ($2m)
Net Income: Year 1: ($2m) Year 2: ($2m) Year 3: ($2m) Year 4: ($2m) Year 5: ($2m)
Year 1:
($10m) financing fee paid to banks
Year 1: $2m Year 2: $2m Year 3: $2m Year 4: $2m Year 5: $2m
Cash:
Year 1: ($10m) Year 2: Year 3: Year 4: Year 5:
Debt:
Year 1: ($8m) Year 2: $2m Year 3: $2m Year 4: $2m Year 5: $2m
Year 1: ($2m) Year 2: ($2m) Year 3: ($2m) Year 4: ($2m) Year 5: ($2m)
Qui illo dolorum molestiae corporis qui odit. Qui odit atque dicta voluptatum optio nemo eos. Ut exercitationem non suscipit ipsum temporibus id itaque. Sint quo quis ut numquam voluptas vero et nobis.
Ad aperiam autem quaerat voluptates minus suscipit. Veritatis vitae harum dolorum architecto. Velit est quaerat culpa numquam. Nulla cupiditate sunt reprehenderit voluptates voluptates.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...