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5a. Nimota Ltd has a liability of A152,500.85, which must be repaid in five (5) years' time. The liability pays 12% interest compounded annually. Calculate

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5a. Nimota Ltd has a liability of A152,500.85, which must be repaid in five (5) years' time. The liability pays 12% interest compounded annually. Calculate the present value of the total liability. (10 marks) 5b. The nominal interest rate charged on bank overdraft is 8%. Given a company tax rate of 35%, calculate the effective cost of the overdraft. (10 marks) 1

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