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answer 34 6-34 When he financed his firm's building, Al Silva bor- rowed $280,000 at 9% interest to be repaid in 30 equal annual end-of-year
answer 34 6-34 When he financed his firm's building, Al Silva bor- rowed $280,000 at 9% interest to be repaid in 30 equal annual end-of-year payments. After making 10 payments, Al found he could refinance the loan at 8% interest for the remaining 20 years. To refinance the loan, Al must pay the balance due plus a prepayment penalty charge of 4% of the balance due, and he must pay a $2000 service charge on the new loan. All payments are financed by the new loan. Should Al refinance the loan, assuming that he will keep the firm's building for the next 20 years? Use an annual cash flow analysis
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