Weston Holdings Ltd

question 168

Short Answer

Weston Holdings Ltd. loaned $3.5 million to a subsidiary to build a plant in Winnipeg. No payments are required for two years, to allow the operations of the plant to become well established. The first monthly payment of $40,000 is due two years after the date the loan was received. If the interest rate charged on the intercompany loan is 9% compounded monthly, how long (measured from the date of the first payment) will it take the subsidiary to pay off the loan?

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Definitions:

Self-efficacy

An individual's belief in their own ability to complete tasks and achieve goals.

Cognitive appraisal

The process of interpreting and evaluating an event or situation that leads to an emotional response.

Relaxation

A state of reduced tension, stress, and mental and physical calm.

Medical etiology

The study or understanding of the causes or origins of diseases.