Jack Ltd is given the opportunity to raise $5 million in debt for 4 years through a local government subsidized program. While Jack Ltd would normally be required to pay 12 percent on its debt issues, the Big County program sets the rate at 9 percent. Assume the loan is repaid in a lump sum at the end of year 4. 

What is the NPV of this subsidized loan? Ignore taxes?

Answer rating: 100% (QA)

To calculate the NPV of the subsidized loan we need to determine the present value of the future cas... View the full answer