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Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $ 2 8 0

Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $280,000. The company can borrow $280,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. Assume interest is paid in full at the end of each year. What if interest rates on the 12 percent loan go up to 18 percent in year 2 and 21 percent in year 3? What would be the total interest cost compared to the 14 percent, three-year loan?

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