You are considering an investment that requires you to spend $150,000 today and receive $200,000 in...
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You are considering an investment that requires you to spend $150,000 today and receive $200,000 in 10 years. The cost of funds from a bank is 4.5% per year if you have collateral and 6.8% if you do not. Would you turn to an informal credit market to access funds at 8.3% if you did not have collateral? Support your answer with some computations. You are considering an investment that requires you to spend $150,000 today and receive $200,000 in 10 years. The cost of funds from a bank is 4.5% per year if you have collateral and 6.8% if you do not. Would you turn to an informal credit market to access funds at 8.3% if you did not have collateral? Support your answer with some computations.
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Answer Since the requirement is of 20000 The amount received from investme... View the full answer
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
Posted Date:
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