Neco Model Questions Vol1 2024 Commerce Question 27
Practice objective / multiple choice question 27 from the 2024 Neco Model Questions Vol1 Commerce examination.
A firm needs \(\text{₦}10,000,000\) for a 3‑year project.\nOption A: a bank loan at 8% per annum payable annually, with an arrangement fee of 2% of the loan amount paid at the start.\nOption B: 10‑year debentures at 6% per annum payable semi‑annually, with an issue cost of 3% of the amount, redeemable after 3 years at 102% of face value.\nWhich source of finance is cheaper over the 3‑year period and by how much (in naira)?
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About This Question
This is Neco Model Questions Vol1 2024 Commerce Question 27. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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