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2. Assume that a farmer has $157,500 in Total Assets and $102,600 in Total Debt, faces 20% income tax rate, and 40% consumption rate. Further,
2. Assume that a farmer has $157,500 in Total Assets and $102,600 in Total Debt, faces 20% income tax rate, and 40% consumption rate. Further, assume that the rate-of-return on assets is 19.5%. What is the interest rate if the firm growth rate is 11.5%? (20 points)
3. Calculate the total interest expense on a $248,000 operating loan borrowed on February 1 at a 10% annual interest rate with repayments projected as $100,000 on August 1, $48,000 on September 1, and $100,000 on December 1. (15 points)
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