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NEW QUESTION: 1
A company is considering taking out $10.000,000 of floating rate bank borrowings to finance a new project.
The current rate available to the company on floating rate barrowings is 8%. The borrowings contain a covenant based on an interested cover of 5 times.
The project is expected to generate the following results:

At what interest rate on the floating rate borrowings is the bank covenant first breached?
A. 8.0%
B. 9.4%
C. 11.0%
D. 10.0%
Answer: C

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