prepare an amortization table for the loan at 16% and at 9% and calculate the difference in after tax interest payments.

the npv of the difference in after tax interest payments is the npv of the loan

10. In late 1984, Sonat, the Birmingham, Alabama-based, energy and energy services company, ordered six drilling rigs that can be partly submerged from Daewoo Shipbuilding, a South Korean shipyard. Daewoo agreed to finance the $425 million purchase price with an 8.5. year loan, at an annual interest rate of 9% paid semiannually. The loan principal is repayable in 17 equal semiannual installments ( $25 million every six months). At the time the loan was arranged, the market interest rate on such a loan would have been about 16%. If Sonat's marginal tax rate (federal plus state corporate taxes) was 50% at the time, how much would this loan be worth to Sonat