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3. A company is eligible for a subsidized 5-year loan of $1 million at 8 percent interest where the usual market rate is 12 percent.
3. A company is eligible for a subsidized 5-year loan of $1 million at 8 percent interest where the usual market rate is 12 percent. The loan is to be repaid in five equal annual payments (of interest plus principal). What is the net present value of this loan?
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