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Anils Computer Services is expecting to expand. It needs $2,000,000 financing over the next two years. It can borrow the total for two years at
Anils Computer Services is expecting to expand. It needs $2,000,000 financing over the next two years. It can borrow the total for two years at 5.5% interest or it can borrow short term by paying 4.5% the first year and 8.0% the second year. (1) What is the total cost of borrowing under each of the two plans? (2) Which plan is less costly?
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