A Start up data analytics company needs P500,000 for its operations. One bank is willing to lend it money for one year at 12.5% interest per annum (discounted). Another lender is charging 14% with principal and interest payable at the end of the year. A third financier will lend it the amount payable in 12 equal monthly installments of Php 46,00 each. Which offer is best for the business?

A Start up data analytics company needs P500,000 for its operations. One bank is willing to lend it money for one year at 12.5% interest per annum (discounted). Another lender is charging 14% with principal and interest payable at the end of the year. A third financier will lend it the amount payable in 12 equal monthly installments of Php 46,00 each. Which offer is best for the business?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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