K-Roo Ltd. wants to expand internationally and is looking at the Euromarkets. It has access to two bank syndicates that are willing to back a USD100 million, 3-year Eurodollar loan. ANZ charges a 1.01% fee and (=0.01*100)% interest. Westpac charges a 0.85% fee and 1.47% interest. K-Roo Ltd. has a 7% discount rate and will make its debt payments on an annual basis. What are the present values of each loan offering? O a. The NPV of ANZ's loan is 3.6343 million, the NPV of Westpac's loan is 4.7077 million. O b. The NPV of ANZ's loan is 3.4743 million, the NPV of Westpac's loan is 4.7077 million. O C. The NPV of ANZ's loan is 3.0807 million, the NPV of Westpac's loan is 3.0807 million. O d. The NPV of ANZ's loan is 3.6606 million, the NPV of Westpac's loan is 3.0807 million. O e. The NPV of ANZ's loan is 3.9510 million, the NPV of Westpac's loan is 5.1335 million.

K-Roo Ltd. wants to expand internationally and is looking at the Euromarkets. It has access to two bank syndicates that are willing to back a USD100 million, 3-year Eurodollar loan. ANZ charges a 1.01% fee and (=0.01*100)% interest. Westpac charges a 0.85% fee and 1.47% interest. K-Roo Ltd. has a 7% discount rate and will make its debt payments on an annual basis. What are the present values of each loan offering? O a. The NPV of ANZ's loan is 3.6343 million, the NPV of Westpac's loan is 4.7077 million. O b. The NPV of ANZ's loan is 3.4743 million, the NPV of Westpac's loan is 4.7077 million. O C. The NPV of ANZ's loan is 3.0807 million, the NPV of Westpac's loan is 3.0807 million. O d. The NPV of ANZ's loan is 3.6606 million, the NPV of Westpac's loan is 3.0807 million. O e. The NPV of ANZ's loan is 3.9510 million, the NPV of Westpac's loan is 5.1335 million.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.5CE: Energy entrepreneur T. Boone Pickens has proposed converting the trucking fleet in the United States...

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