Your instructor may decide to grant you a loan or a budget increase or decrease. This will usually be done at specific periods and under certain conditions to be defined by your instructor.
A loan is characterized by its principal – the amount of additional money that you will get – its interest rate in %, its duration in years and the period P at which it is granted. For example, a $5 million loan is granted to team R in Period 3 at 4% interest rate over 5 years.
In the Markstrat world, loans are granted at the beginning of the year so that you can use the principal immediately, for instance to invest in new R&D projects. As a consequence, you will incur interests in the first year of the loan. However, you will not start to reimburse the principal before period P+1 so that it can be paid with the outcome of the period P investment. A complete example is detailed in Figure 8.
|
|
Principal |
Principal Reimbursed |
Interests |
|
Period P |
5 000 000 |
0 |
200 000 |
|
Period P+1 |
|
923 136 |
200 000 |
|
Period P+2 |
|
960 061 |
163 075 |
|
Period P+3 |
|
998 463 |
124 672 |
|
Period P+4 |
|
1 038 402 |
84 734 |
|
Period P+5 |
|
1 079 938 |
43 198 |
|
Period P+6 |
0 |
0 |
0 |
Figure 8 – Sample Loan Schedule