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The CFO of Kendrick Enterprises, is evaluating a 1 0 - year, 6 . 5 percent loan with gross proceeds of $ 5 , 3
The CFO of Kendrick Enterprises, is evaluating a year, percent loan with gross proceeds of $ The interest payments on the loan will be made annually. Flotation costs are estimated to be percent of gross proceeds and will be amortized using a straightline schedule over the year life of the loan. The company has a tax rate of percent and the loan will not increase the risk of financial distress for the company.
a
Calculate the net present value of the loan excluding flotation costs. Do not round intermediate calculations and round your answer to decimal places, eg
b Calculate the net present value of the loan including flotation costs. Do not round intermediate calculations and round your answer to decimal places, eg
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