3.a. The manager is debating how to raise $12M to finance the investment. The annual interest rate on a risk-free bond is 4 percent per year. Given the interest rate, how much would the firm have to pay back in six years? Show your work

3.b. Suppose that in order to raise $12M in debt, the market requires a risk premium of 7 percent on the firms bond. Given the risk free rate of 4 percent, how much would the firm pay back in six years? Show your work