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What is the monthly payment amount on the loan

The company needs to finance $8,000,000 for a new factory in Mexico. The funds will be obtained through a commercial loan and by issuing corporate bonds. Here is some of the information regarding the APRs offered by two well-known commercial banks.

Bank APR Number of Times Compounded

National First Prime Rate + 6.75% Semiannually

Regions Best 13.17 Monthly

1. Assuming that AirJet Parts, Inc. is considering loans from National First and Regions Best, what are the EARs for these two banks?

2. Based on your calculations above, which of the two banks would you recommend and why? Explain your rationale.

3. AirJet Best Parts, Inc. has decided to take a $6,950,000 loan being offered by Regions Best at 8.6% APR for 5 years. What is the monthly payment amount on this loan? Do you agree with this decision? Explain your rationale.

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Finance Basics: What is the monthly payment amount on the loan

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the monthly payment amount on the loan

Reference No:- TGS0552932

Recent Questions Asked Finance Basics

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Q : Determine the operating cash flow or ocf

Q : Journalize the transaction of value of the services

Q : Npv analysis for project

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