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  3. question 1 the nhc can secure a loan from the crdb

Question 1 The NHC can secure a loan from the CRDB bank. The corporation would...

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Accounting

image Question 1 The NHC can secure a loan from the CRDB bank. The corporation would like to make use of this loan in a manner that it maximizes profits. As a consequence it has three potential options. known hereafter as option A, B and C. While option A comprises of developing low cost houses for selling to the public, option B entails developing accommodation flats for renting to the public. The corporation can also make use of the loan to repair the existing houses it posses. This is known as option C. The bank expects the corporation to pay back not later than year 10 from now. The costs, life spans and other data for the three options is given below. 1.1 You have been contracted to appraise the three projects. Which project is worth pursuing? Use an interest rate of 12%. 1.2 If the CRDB charges an interest rate of 15% for the loan, is the recommendation you gave in part 2.1 stiil valid? Why

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