1. You plan to borrow $75,000 at a 7% annual interest rate. the terms require you to amortize the loan with 10 equal end-of-year payments. how much interest would you be paying in year 2?
2. Three Guys Burgers, Inc., has offered $19 million for all of the common stock in Two Guys Fries, Corp. The current market capitalization of Two Guys as an independent company is $15 million. Assume the required return on the acquisition is 9 percent and the synergy from the acquisition is a perpetuity. What is the minimum annual synergy that Three Guys feels it will gain from the acquisition?