An investment in the Mezzogiorno will receive a subsidized loan of $12 million from the Italian government. The loan bears an interest rate of 7% in contrast to a market rate of 10%. The loan principal must be paid back in 8 years. What is the present value of the interest subsidy?

Answer rating: 100% (QA)

Answer The value of the subsidy per year 12000000 3 360000 Now we have to fin... View the full answer