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Please answer ASAP Problems Question 1 Nur Bhd is seeking a loan for a period of one year for its intended purchase of a computer
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Problems Question 1 Nur Bhd is seeking a loan for a period of one year for its intended purchase of a computer system. The system will cost RM250,000 of which only 80% financing is required. Nur Bhd is considering two alternatives: Alternative 1: A loan from Bumiputra Commerce where it has a balance of RM20,000 in its current account. Interest is charged at 0.5% above the base lending rate of 6.5%. A compensating balance of 12% is required Alternative 2: A loan from Perwira Affin Bank at 6% interest with a 10% compensating balance. Interest is to be paid in advance. Required: Calculate the cost of financing for the two alternatives. b. Which alternative should Nur Bhd choose and why? aStep by Step Solution
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