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Toyota is interested in borrowing $5 million for 90 days. National Australia Bank has quoted a rate of 1.125 percent under the prime rate of

Toyota is interested in borrowing $5 million for 90 days. National Australia Bank has quoted a rate of 1.125 percent under the prime rate of 6.25 percent. Daiwa Bank is offering Toyota a rate of 0.75 percent over the three-month LIBOR of 4.2 percent. Required Part (a) Which is the better deal for Toyota, and what is the lower interest cost in dollars? Part (b) Define yield to maturity. Why is it important?

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