Suppose there are two types of drivers on the road today. speed racers have a 28% chance of causing an accident per year, while low riders have a 4% chance of causing an accident per year. suppose there are the same number of speed racers as there are low riders (i. e. the proportions are 1/2, 1/2), and that the cost of an accident is $46,000.

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