THE QUESTION IS : Suppose the government of Germany offers you a 3-year, non-amortizing 50,000 euros loan to entice you to undertake a particular project within its borders. In addition, the government offers you an attractive rate of iEUR = 10% p.a. when loans of similar risk yield a return of iEUR = 15% p.a. The German tax rate is 50%. What is the present value of the interest subsidy on this loan?
Get Answers For Free
Most questions answered within 1 hours.