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Dear Sir,
I do not understand how the annual subsidy benefit is calculated in the financing side effects. The answer given is
Annual subsidy benefit $42,970,000 x 60% x 0·025 x 80% = 515·64I do not understand why 10-year government debt yield rate 2.5% used here, and what 80% means in the calculation.
Appreciated your help in advance.
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