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Identify which would be the best option for north

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North Ltd is entering into an interstate expansion phase and requires $10,000,000 to fund this project. North Ltd does not have the funding for this investment today and need to borrow the funds. Income from new branches will fund operation and borrowing costs over the 10 year term of the loan.

The company is considering the options below, with repayments consisting of principal and interest:

1. Global Banking Corp (GBC). Quarterly repayments due at the end of each quarter. The interest rate will be 4.1% p.a. compounding quarterly.

2. International Financing Group (IFG): Annual repayments due at the end of each year. The interest rate will be 4% p.a. compounding annually.

3. Worldwide Wholesale Banking Services (WWBS): Repayments to be made at the end of each 2 year period, across the 10 year term. The interest rate will be 4.05% p.a. compounding annually.

Question a. Calculate the repayments for each of these options.

Question b. Identify which would be the best option for North, showing all calculations.

Reference no: EM132518695

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