Your financial adviser indicates the likely terms of a Project Financing (below).Then he

suggests that you consider adding Political Risk Insurance from MIGA at a cost of a $6 M

upfront fee.Set up the cash flows to calculate the all-in financing cost, assuming you agree to

add the MIGA PRI. Solve the all-in financing cost, expressing the answer in terms of an all-in

interest rate before and after-tax.You may assume that interest expenses and fees are tax

deductible @30 % in the year-incurred.

Loan Assumptions:

Loan Amount:$300 M

Tenor8 years

Interest Rate5%

Amortization$50 M/year, beginning at the end of year 3

Advisory Fees1/ 2 %

Arrangement Fee1%

Annual Compliance Costs$500 k