Question
A bank offers you a $1M loan with an IRR of 3%. (Recall from class that in this case you can interpret the IRR as
A bank offers you a $1M loan with an IRR of 3%. (Recall from class that in this case you can interpret the IRR as a borrowing rate.) The bank asks you to repay the loan in 8 equal annual installments. (a) What is the annual repayment on the loan? (b) What is the NPV of the loan if your opportunity cost of capital is 10%?
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International Financial Management
Authors: Cheol Eun, Bruce Resnick
7th Edition
0077861604, 9780077861605
