TOPIC 2, QUESTION 32: Mini Case - Choosing the Best Financing Sessions Manufacturing Company needs to expand their existing facility and needs to secure $35 million in financing to fund the expansion. Ben Bates, the CFO of Sessions Manufacturing Company, has decided that debt financing is the best option at this time and is meeting with a loan officer of First Trust Capital to discuss loan options. The first option is a traditional loan with a 30-year term. The loan would be repaid in monthly installments, with no closing costs and an APR of 5.7%. The bank also offers a 20-year mortgage with the same APR. The second loan option is a "smart loan." The loan is structured as follows: every two weeks a payment is due that is exactly half of the monthly payment due on a 30-year traditional mortgage. The APR of the smart loan is the same as the traditional mortgage listed above. Another option is a bullet loan, or a balloon payment. The monthly payments of the bullet loan are calculated using a 30-year traditional mortgage. For 5 years, the company would make payments for a 30-year mortgage, but immediately after the 60th payment, the remaining