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What is the present value of the interest subsidy

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Reference no: EM132410899

An investment in the Mezzogiorno will receive a subsidized loan of $12 million from the Italian government. The loan bears an interest rate of 7% in contrast to a market rate of 10%. The loan principal must be paid back in 8 years. What is the present value of the interest subsidy?

Reference no: EM132410899

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