A small business received a five-year $1,000,000 loan at a subsidized rate of 3 percent per year. The firm will pay 3 percent in annual interest and will pay the principal at the end of the five years. If the market interest rate on similar loans is 6 percent per year, what is the NPV of the loan? (Ignore taxes.) O +$348,369 O -$137,391 -$501,595 O +$126,371

A small business received a five-year $1,000,000 loan at a subsidized rate of 3 percent per year. The firm will pay 3 percent in annual interest and will pay the principal at the end of the five years. If the market interest rate on similar loans is 6 percent per year, what is the NPV of the loan? (Ignore taxes.) O +$348,369 O -$137,391 -$501,595 O +$126,371

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

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