TABLE 8.2 Use the Information for Polaris Corporation to Answer the Following

question 3

Multiple Choice

TABLE 8.2
Use the information for Polaris Corporation to answer the following question(s) .
Polaris is taking out a $5,000,000 two-year loan at a variable rate of LIBOR plus 1.00%. The LIBOR rate will be reset each year at an agreed upon date. The current LIBOR rate is 4.00% per year. The loan has an upfront fee of 2.00%

-Refer to Table 8.2.If the LIBOR rate jumps to 5.00% after the first year what will be the all-in-cost (i.e.the internal rate of return) for Polaris for the entire loan?

• A)5.25%
• B)5.50%
• C)6.09%
• D)6.58%

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Definitions:

Proximodistal

A pattern of development where growth starts at the center of the body and moves towards the extremities.

Biodynamic

A farming and gardening method that relies on organic techniques, lunar cycles, and holistic approaches to cultivation.

Cephalocaudal

A pattern of growth and development in organisms where development begins at the head and progresses towards the tail or feet.

Proximodistal

A principle of physical growth that states development proceeds from the center of the body outward.