FIN 200 WEEK 7 Assignment Loan Scenarios

Apr 18th, 2015
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WEEK 7 Assignment: Loan Scenarios Assignment: Loan ScenarioMidland Chemical Co.Pp. 250- 251A.The 9.75% interest rate is the better way to go. 8.25%500,000 x 8.25% = 41,250500,000 + 41,250= 541,250541,250 x 20% = 108, 250 541,250 + 108,250 = 649,500 9.75%500,000 x 9.75% = 48,750500,000 + 48,750 = 548,750548,750 + 5,500 = 554,250B.2 x 12 x 41,250 = 990,000 = 13 x 500,000 = 6,500,000 =Answer 15.23 %C.41,250 x 360 = 41,250500,000 - 100,000 x 360 = 400,00041,250/ 400,000 = 10.3125%Yes the firm should borrow the funds.D.Yes otherwise the rate would be much higher.41,250 x 360 =500,000 x 80 = 8.25% x 4.5% = 37.125%E.10.25%500,000 x 10.25% = 51,250500,000 + 51,250 = 551,250551,250 x 20% = 110,250551,250 +

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