A 10-year $14,600,000 long-term loan from the Ottawa Bank. The loan has the following terms: a. The interest rate is 6.5%, compounded annually, for the first five years of the loan. The interest rate for the second five years is to be established at the beginning of the second five-year term based on prime interest rates at that time. Interest is due at the end of each year. b. The bank will charge a $110,000 upfront administration fee. c. HPL will agree to issue no new long-term debt over the life of the loan, without the express permission of Ottawa, and maintain dividend declarations to common shareholders at no more than current levels (approximately 10%15% of earnings). d. The loan will be secured by a second mortgage on HPLs printing facilities and a floating charge on all corporate assets. e. Principal is due at the end of the loan term.

Advantages and disadvantages of choosing this plan. follow Qualitative and quantitative approach.