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3 ) Suppose that Madison s Monograms needs to finance $ 7 7 0 , 0 0 0 worth of assets. It can either finance
Suppose that Madisons Monograms needs to finance $ worth of assets. It can either finance them using James plan that would involve taking out a two year loan with an interest cost of or it could use Jimmys plan that would pay interest on the loan for the first year and then interest on the second. Is James or Jimmys plan less expensive? Any other considerations before making a choice? What is the difference in interest cost between James' and Jimmy's plans?
Suppose that Madisons Monograms needs to finance $ worth of assets. It can either finance them using James plan that would involve taking out a two year loan with an interest cost of or it could use Jimmys plan that would pay interest on the loan for the first year and then interest on the second. Is James or Jimmys plan less expensive? Any other considerations before making a choice? What is the difference in interest cost between James' and Jimmy's plans?
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