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. Without using Excel:
(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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Corporate Financial Management
Authors: Douglas R. Emery, John D. Finnerty, John D. Stowe
4th Edition
1935938002, 9781935938002
