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Question 1 1 pts Smallco takes out a 1,000 one-year loan that its bank describes as a 10% interest loan. The loan contract states that
Question 1 1 pts Smallco takes out a 1,000 one-year loan that its bank describes as "a 10% interest loan." The loan contract states that SmallCo will get 1,000 at EOY 0 and repay repay 100+ 1,000 at EOY 1. The contract also states that Smallco will pay the bank a fee of 50 at EOY zero, for the right to enter into the agreement. What is Smallco's pre-tax cost of capital for this loan? Round your answer to three decimal places and do not represent your answer as a percent. Hint: the pre-tax cost of capital is the IRR for this project, considering all its cash flows
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