A borrower has two alternatives for a loan: (1) issue a $360,000,90-day, 7% note or...
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A borrower has two alternatives for a loan: (1) issue a $360,000,90-day, 7% note or (2) issue a $360,000,90 day note that the creditor discounts at 7%. Assume a 360 -day year. a. Compute the amount of the interest expense for each option. $ for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $360,000, 90-day, 7\% interest-bearing note (2) $360,000,90-day note discounted at 7% $$ c. Alternative is more favorable to the borrower because the borrower
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