Year 2 Year 4 coupon in Year 6. Year 0 Year 1 20000 6% Year 3 -2000 Year 5 -2000 Year 6 -2000 Cash Flow - 22000 -2000 -2000 Interest Rate 6% Discount Rate Total Cost of Financing NPV 9,835 -$3,933.86 Another loan company in Europe offers you a 6 year loan with a 7% coupon payment equal payments over 6 years. Which loan do you take? Why? (Hint: the cheapest loan may or may not be the right answer) Bond B Year 0 Year 1 Year 2 Year 3 Year 5 Year 6 Year 4 -1750 25000 -1750 Cash Flow -1750 -1750 - 1750 -26750 6% 6%% Interest Rate Discount Rate Total Cost of Financing NPV 8,605 -1,229.33 Question 3: Which financing offer do you take? Question 4: Why did you pick that offer? Question 5: Are there other considerations besides the cost