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Question 3 A bank offers you a $1M loan with an IRR of 4% (i.e. the bank makes a return of 4% on the loan).

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Question 3 A bank offers you a $1M loan with an IRR of 4% (i.e. the bank makes a return of 4% on the loan). The bank requires you to repay the loan in 14 equal annual installments, starting next year (a) What is the annual payment on the loan, to the nearest dollar? (b) What is the NPV of the loan if your opportunity cost of capital is 10%? State your solution to the nearest dollar

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