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Question 5 Suppose a firm borrows $12,000 in 3 equal disbursements (at years 0,1,2 ), at an interest rate of 7%, with a commitment to

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Question 5 Suppose a firm borrows $12,000 in 3 equal disbursements (at years 0,1,2 ), at an interest rate of 7%, with a commitment to repay the loan (principal and interest) in equal annual instalments over 10 years. From a borrower's perspective calculate: a) The amount of the annual principal repayment. b) The stream of interest payments which can be entered in the tax calculation of the private benefit-cost analysis. c) The stream of total annual repayments. Hint: You need to first calculate the present value of the loan amount in year 0 and use it to calculate principal \& interest repayments. Question 6 If a firms cash flow is: d) Calculate the annual equivalent repayment. Explore calculating the same cost using different methods

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