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April 16, 2014

Homework Help: Financial Management

Posted by Anonymous on Monday, February 22, 2010 at 8:18pm.

Proctor Micro-Computers, Inc. requires $1,200,000 in financing over the next two years. The firm can borrow the funds for two years at 9.5 percent interest per year. Mr. Procter decides to do economic forecasting and determines that if he utilizes short-term financing instead, he will pay 6.55 percent interest in the first year and 10.95 percent interest in the second year. Determine the total two-year interst cost under each plan. Which plan is less costly

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