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While principle repayment is not a cost, it's a cash flow, so you can't exclude it when you're trying to figure out if you can cover your monthly nut. Similarly
by tomkarlo 16y ago
While principle repayment is not a cost, it's a cash flow, so you can't exclude it when you're trying to figure out if you can cover your monthly nut. Similarly, you can't include the present value of expected future income from the sale of the business into your current estimate of what expenses you can cover.
- tomsaffell 16y agoPrinciple repayment is optional (when taking a loan). It only makes a small difference to interest rate [1]. So for the purposes of discussing cost minimization, it is legitimate to exclude it. [1] http://www.schwab.com/public/schwab/banking_lending/mortgages/todays_rates?cmsid=P-2266141&lvl1=banking_lending&lvl2=mortgages http://www.schwab.com/public/schwab/banking_lending/mortgage...
- jacques_chester 16y agoPedantic nitpick: Principal is the subject of a loan, or the leader of a school. Principle is an idea that people may hew to and argue about.
- tomsaffell 16y agoCould those who are down voting please explain why.