Financing - Need help ASAP

[losangeles1988]

Hi,
I need help understanding these math problems for one of my classes. I have uploaded the documents my teacher provided with the questions and answers in PDF format.


Question 1: How much gap or subordinated financing is required? Document link: https://www.docdroid.net/sGxuZc0/problem-1.pdf.html
My problem: I get confused at the end - where is 1,895,000 coming from (from the answer sheet)? Not sure how to get the answer.


Question 2: What is the required amount of the "bank gap" or subordinated debt to be financed for the following motion picture? Document link: http://docdro.id/EYDbaCm
My problem: Confused at the end calculation again. Get lost around the senior bank loan part in the answer.


Question 3: A producer enters into a home video agreement with a domestic distributor and receives a non- refundable advance of $1,500,000. The distributor ships 300,000 units at $17.50 whoelsale per unit. The distributor’s distribution fee is 20% of Net Wholesale Revenues (as defined in question 1 above) with returns equal to 20% of Gross Wholesale Revenue; along with Rebates and Discounts equaling $225,000, sales & marketing costs capped at 25% of Gross Wholesale Revenue; and manufacturing and reproduction costs of $975,000. What amount, if any, is the producer/financier entitled to receive in accordance with this agreement? Document link: https://www.docdroid.net/VPlZbTm/dist-problems-answers.pdf.html (Question 2 on the sheet)
My problem: I understand the problem up until 892,500 on the answer sheet... notice a pattern?

Thanks so much everyone.

 

[Deleted member 4993]

Hi,
I need help understanding these math problems for one of my classes. I have uploaded the documents my teacher provided with the questions and answers in PDF format.


Question 1: How much gap or subordinated financing is required? Document link: https://www.docdroid.net/sGxuZc0/problem-1.pdf.html
My problem: I get confused at the end - where is 1,895,000 coming from (from the answer sheet)? Not sure how to get the answer.

There are bunch of positive and negative numbers - did you play with those to see where you land?


Question 2: What is the required amount of the "bank gap" or subordinated debt to be financed for the following motion picture? Document link: http://docdro.id/EYDbaCm
My problem: Confused at the end calculation again. Get lost around the senior bank loan part in the answer.


Question 3: A producer enters into a home video agreement with a domestic distributor and receives a non- refundable advance of $1,500,000. The distributor ships 300,000 units at $17.50 whoelsale per unit. The distributor’s distribution fee is 20% of Net Wholesale Revenues (as defined in question 1 above) with returns equal to 20% of Gross Wholesale Revenue; along with Rebates and Discounts equaling $225,000, sales & marketing costs capped at 25% of Gross Wholesale Revenue; and manufacturing and reproduction costs of $975,000. What amount, if any, is the producer/financier entitled to receive in accordance with this agreement? Document link: https://www.docdroid.net/VPlZbTm/dist-problems-answers.pdf.html (Question 2 on the sheet)
My problem: I understand the problem up until 892,500 on the answer sheet... notice a pattern?

Thanks so much everyone.

.