With respect to the bank loan itself, present value calculations are not necessary since the present value of all loan payments equals the original loan principal. PVORD = $26,500, IY = 7.7...With respect to the bank loan itself, present value calculations are not necessary since the present value of all loan payments equals the original loan principal. PVORD = $26,500, IY = 7.75%, CY = 12, FV = 10% × $26,500 = $2,650, Years = 2 The timeline for the lease appears in the second timeline below. Note that the cost in the fifth year occurs at the beginning of the year, which is the same point in time as the end of the fourth year.
