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Q.1 (20 Marks) A foreign investor is planning to start multinational business in Oman. He is considering to borrow a $100 million loan for a

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Q.1 (20 Marks) A foreign investor is planning to start multinational business in Oman. He is considering to borrow a $100 million loan for a four-year maturity. It will be an amortizing loan, meaning that the interest and principal payments will total, annually, to a constant amount over the maturity of the loan. There is, however, a debate over the appropriate interest rate. The borrower believes the appropriate rate for its credit standing in the market today is 10%, but a number of the international banks which it is negotiating with are arguing that it is most likely 12%, at the minimum 11%. Based on the above scenario, you are the required to: a- Calculate the amortized interest, principal and total payments schedules for 4 Years @ 10%, 11% and 12% respectively. (15 Marks) b- Critically analyze the impact of these different interest rates on the prospective annual payments and potential risks involved for a foreign borrower

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