Question: With a step by step solution: 1. Western Bank offers you a loan of $22,000 for a 6-year term at 7 percent annual interest. What

With a step by step solution:

1. Western Bank offers you a loan of $22,000 for a 6-year term at 7 percent annual interest. What is the annual loan payment you need to make to the bank?

2. Two mutually exclusive projects have an initial cost of $22,000. Project A produces cash inflows of $11,200, $8,700, and $13,500 for years 1 through 3 respectively. Project B produces cash inflows of $6,700, 13,500, and 12,600 for years 1 through 3 respectively. The required rate is 10 percent. which project would you choose to invest in and why?

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