Your firm is considering two one-year loan options for a $500,000 loan. The first carries fees of
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The other carries fees of 1% of the loan amount and charges interest of 4.5% of the loan amount.
a. What is the net amount of funds from each loan?
b. Based on the net amount of funds, what is the true interest rate of each loan?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780133507676
3rd Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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