Each year m. lloyd corporation rewards the year's best-performing employee. the reward is based on the individual performance of an employee, his or her level of commitment toward the organization, and his or her crisis management skills. the company gives this reward to encourage other employees to also put in the same kind of effort in their work. in this scenario, m. lloyd corporation follows the theory.

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan