Jensen Motorsports Has a New Project That Will Require the Company

question 78

Multiple Choice

Jensen Motorsports has a new project that will require the company to borrow $3,000,000. Jensen's has made an agreement with three lenders for the needed financing. Citizens' Bank will give $1,500,000 and wants 10% interest on the loan. Visitors' Bank will give $1,000,000 and wants 12% interest on the loan. Peoples' Bank will give $500,000 and wants 13% interest on the loan. What is the weighted average cost of capital for this $3,000,000?

• A) 10.55%
• B) 11.17%
• C) 11.66%
• D) 12.16%

---

Definitions:

Alzheimer's Disease

A progressive neurodegenerative disorder characterized by memory loss, cognitive decline, and personality changes, linked to the accumulation of amyloid plaques and neurofibrillary tangles in the brain.

Expert Chess Players

Individuals who have achieved a high level of proficiency and understanding in the game of chess, often participating in competitive play.

Novice Chess Players

Individuals at the beginner level of chess skill, characterized by limited experience and knowledge of the game.

Mnemonic Device

A tool that helps remember facts or large amounts of information, often using rhyme, pattern, or acronym.