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Kindly help me in answering the following assignments. Thank you A company negotiates a Sh 30 million loan for eight years from a financial institution.

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Kindly help me in answering the following assignments. Thank you

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A company negotiates a Sh 30 million loan for eight years from a financial institution. The interest rate is 14% per annum on the outstanding balance of the loan. The principal and interest will be repaid in eight equal year-and instalments. Required Prepare a loan repayment scheduleA company has just borrowed $100,000 at a fixed rate of 8% pa. The loan is to be repaid at par value in five years and interest must be paid at the end of each year. In order to reduce its exposure to fixed rate borrowing, it arranges an interest rate swap to exchange the 8% pa fixed rate for a variable rate that is 1% higher than the central bank's base rate at the time when the interest payments are due. Over the next five years, the base rates turn out to be: (71/2%, 612%, 7/2%, 81/2%, 912%) (i) State the constant effective annual interest rate that would have been paid by the company if it had not arranged the swap. [1] (ii) Calculate the equivalent constant effective annual interest rate that has been paid by the company as a result of taking out the swap. [4]On further analysis of Project A, WrongTum finds that the risk involved in the cashflows comes primarily from one source of uncertainty, which it analyses further. The cashflow at the end of Year 2 has a high risk of not materialising. In fact there is a 25% chance that the cashflow will simply not happen, and a 75% chance that it will in fact be earned. If the company wishes to analyse Project A using its cost of capital (15% pa) rather than an arbitrarily high hurdle rate of 20% pa, how can this be achieved? (We will refer to this project after allowance for the reduced expected cashflow at time 2 as Project C.)

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