Question ID:RBC 1BC5 22 You are considering Indoor Sports' request for a loan to finance the s6o0,o00 replacement of some old production equipment. Indoor Sports has been in past three years. The business plans to repay business for over 10 years, with stable though seasonal sales of about $2,500,000 during each of the the loan over a five-year period. Does this request seem reasonable to you? Yes, the loan seems reasonable, although a term of one to two years would be more appropriate. OYes, it appears reasonable that the business would need such financing and that it would repay over five years so as not to strain its operating cash. If sales are flat, Indoor Sports should not need that much new equipment. No. Although the purpose of the loan is reasonable, the business should be able to repay the loan with a combination of the collection of this year's receivables and the salvage value of the old equipment. Mark for review