As a Corporate Finance Manager you have an option to borrow under the following terms and structures:

A $1,000,000.00 loan at a fixed rate of 3.65 percent fully amortizing for 30 years or a $1,000,000.00 3.80 percent "interest only" loan for 10 years.

There is no right or wrong answer .... just a preference by the Corporate Finance Manager or the Corporate Finance team.

Please answer in Blackboard and come to class on Monday evening prepared to state your reason(s) for choosing one term and structure or the other. Be extremely thorough with your answers and calculations and again, be ready for any challenges from your classmates.

Objectives: interest rates, forecasting, present value, future value, cash flow and financial decision making.?