Bank A plans to borrow $ 1,000,000 from bank B. The amount will actually be borrowed one
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Bank A plans to borrow $ 1,000,000 from bank B. The amount will actually be borrowed one year from now, and repaid after two more years. If the loan is considered risk-free, what is the interest rate bank A will be paying to bank B?
Suppose you have a risk-free project with the following cash flows:
Year | Cash flow |
1 | -2,000,000 |
2 | 800,000 |
3 | 1,000,000 |
4 | 700,000 |
What is the net present value of the project? How about its internal rate of return?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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