Morgan Contractors borrowed $1.75 million at an APR of 10.2 percent. The loan called for a compensating

Question:

Morgan Contractors borrowed $1.75 million at an APR of 10.2 percent. The loan called for a compensating balance of 12 percent. What is the effective interest rate on the loan?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

See More Books

Question Posted: Jun 12, 2012 01:11 AM

See More Questions

What is the effective interest rate on a $750,000 loan at 8% for 120 days if a 20% minimum compensating balance is required?
What is the effective interest rate for a loan of $5,000 at 10% compounded semiannually for three years? Use the simple interest formula method?
What is the effective interest rate for a loan of $20,000 for three years if the interest is compounded quarterly at a rate of 12%?
Why is it fundamentally important that costs are correctly classified as either a product cost or a period cost? What is the financial outcome if costs are misclassified?
Toys 4 Us sells miniature drones for hobbyists for a price of $1,200. The variable cost for each drone is $750. The fixed costs associated with the drone amount to $900,000 per year. Required a....
What are the advantages and disadvantages of placing such a heavy focus on eco-friendly and sustainable business practices? EVOS was started in Tampa, Florida, in 1994 by Alkis Crassas, Michael...
The FASB requires for-profit entities to classify their investments as trading, available-for-sale, or held-to-maturity. However, it does not require not-for-profit entities to do the same. What...
You are managing a company that stocks and distributes hardware. The company employs two purchasing agents who receive combined salaries of $90,000. They process six thousand purchase requests per...
Database systems may profoundly affect the fundamental nature of accounting. The basic rationale for the double-entry model is that the redundancy of recording the amount of a transaction twice...
Values for the NASDAQ composite index during the 1,500 days preceding March 10, 2006, can be downloaded from the authors web site. Calculate the one-day 99% VaR and the one-day 99% ES on March 10,...
The Kellogg Bank requires borrowers to keep an 8 percent compensating balance. Gorman Jewels borrows $340,000 at a 7 percent stated APR. What is the effective interest rate on the loan?
Maltz Landscaping has an average collection period of 38 days for its accounts receivable. Currently, Maltz factors all of its receivables at a 2 percent discount. What is the effective annual...
List the following species in order of decreasing basicity: a. b. CH,CHC CHCH NH2 CH,CH20 F
In addition to the strongest military in the world, the United States wields enormous soft power. Define soft power. What factors make the United States powerful when it comes to soft power?
Tampa by the Bay Cardiology practice is experiencing long wait times for new patient appointments. Next available appointment is 30 days. The administrator has asked the practice manager to construct...
In 2013, Idalia Hernndez Ramos, a middle school teacher in Mexico, was a victim of cyber harassment. After discovering that one of her students tweeted that the teacher was a "bitch" and a "whore,"...
Your life couldn't be any better. You just accepted a new role as a senior consultant for a project management services firm in San Francisco, and the move is finally happening. You've got a great...
What are the two "engines" that drive earth's processes, how do they work (basically) and what are their energy sources? How do the "engines" influence and interact with the Earth Systems? (provide a...
(High-low method; flexible budget) Denver Company has gathered the fol lowing information on its utility costs for the past six months. a. Using the high-low method, determine the cost formula for...
Respond to the ethical judgments required based on the following scenarios. Scenario 1. Assume you have collected a sample using MUS and that you have evaluated that sample to calculate a total...
For each of the following pairs of operators calculate the operator LM ML; hence state which of the pairs are commutative (that is, satisfy LMx(t) = MLx(t)): (a) L= (b) L= (c) L = (d) L = d dt d -...
Turn back to Table 3.7, which shows marginal personal tax rates. Make a table in Excel that calculates taxes due for income levels ranging from $10,000 to $10 million. a. For each income, calculate...
Construct a balance sheet for Sophie's Sofas given the following data. What is shareholders' equity? Cash balances = $10,000 Inventory of sofas = $200,000 Store and property = $100,000 Accounts...
Construct a balance sheet for Fincorp for 2013 and 2014. What is shareholders' equity?
An 8%, 30-year semi-annual corporate bond was recently being priced to yield 10%. The Macaulay duration for this bond is 10.2 years. What is the bonds modified duration? How much will the price of...
Question 7 of 7 0/14 W PIERDERY Current Attempt in Progress Your answer is incorrect Buffalo Corporation adopted the dollar value LIFO retail inventory method on January 1, 2019. At that time the...
Cost of debt with fees . Kenny Enterprises will issue a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 9.9% with semiannual payments, and will use an investment...

Morgan Contractors borrowed $1.75 million at an APR of 10.2 percent. The loan called for a compensating

Question:

Step by Step Answer:

Amount to be borrowed 1750000 Stated annual interest rate 102 Compensating balance 12 Amount dep...View the full answer

Fundamentals of corporate finance

Students also viewed these Corporate Finance questions