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Cash flow of the loan from the borrower perspective

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Reference no: EM132084388

Suppose that a firm has borrowed $200,000 in the current year at 15% interest rate, with a commitment to repay the loan (principal and interest) in equal annual instlaments over the following 10 years.

Calculate (a) The cash flow of the loan from the borrower's perspective (b) The amount of the annual principal repayment (c) The stream of interest payments which can be entered in the tax calculation of the private benefit-cost analysis

Reference no: EM132084388

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