Reference no: EM132506058

A company has requested a $ 40 million loan from a banking institution in the country for a term of 10 years. In addition, the strategic planning management of this company estimates that inflation in the next 3 years will be 15%, in the subsequent 3 years it will be 18%, and in the last 4 years it is estimated that it will be 22%. On the other hand, the planning management considers that the banking institution thinking about the inflation rates that will prevail in the future, will charge interest of 20% in the first three years, 25% in the following 3 years and 28% in the last four years. If the collection of this liability originated expenses of the order of $ 1,500,000, and the tax rate is 50%, what would be the real cost of this source of financing?