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In each of the following pairs, which loan would be likely to be priced with a higher interest rates, all other things being equal? Why?
In each of the following pairs, which loan would be likely to be priced with a higher interest rates, all other things being equal? Why? (briefly explain) a. A seasonal loan to finance a temporary increase in A/R A term loan to the same company to finance the purchase of new production equipment b. A seasonal loan to finance acquisition of raw materials, production of goods for sale, and A/R collection period A seasonal loan to finance a temporary increase in A/R C. A term loan to a company that is leveraged with a debt to net worth ratio of 1.5 and that has a positive historical and projected cash flow after financing costs A term loan to a company in the same industry that is leveraged with a debt to net worth of 2.0 and that has negative historical cash flow after financing costs but positive projected cash flow after financing costs d. A secured loan to a company that will require you to analyze monthly financial statements and a borrowing base certificate An unsecured loan to a company that will require you to analyze quarterly financial statements
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