Introduction
The Course Project is an opportunity for you to apply concepts learned to a real-life simulation experience. Throughout the Course Project, you will assume that you work as a financial analyst for the Coca Cola Company. The Course Project is provided in two parts as follows:
Part I – In Part I, you work with Coca Cola's staff to identify the best loan options, as well as to valuate stocks and bonds.
Part II – In Part II, you will provide the company with a recommendation for purchasing a new machine. You will base your recommendation on the Net Present Value (NPV) of the capital investment project using the cost of capital (WACC) as your discount rate.
This course project requires that you show all your calculations and in some cases, the information obtained on companies over the web. Acceptable ways to show your calculations include:
1. Write your formulas and numbers used.
2. Attach an excel sheet to your work.
3. Copy/paste a snapshot of an online calculation or website.
4. A link to the website used, the calculator used listing all the variables used under each box.
Task 1: Assessing loan options for Coca Cola.
The company needs to finance $8,000,000 for a new factory in Mexico. The funds will be obtained through a commercial loan and by issuing corporate bonds. Here is some of the information regarding the APRs offered by two well-known commercial banks.
Bank APR Number of Times Compounded
National First Prime Rate + 7.75% Monthly
Regions Best 8.7 Quarterly

1. Assuming that Coca Cola is considering loans from National First and Regions Best, what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board’s website (http://research.stlouisfed.org/fred2/series/MPRIME). Select “Interest Rates” and then “Prime Bank Loan Rate”. Use the latest MPRIME. If you have issues with this