The Rasputin Brewery is considering using a public warehouse loan as part of its short-term financing. The
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The Rasputin Brewery is considering using a public warehouse loan as part of its short-term financing. The firm will require a loan of $550,000. Interest on the loan will be 9.6% (APR, annual compounding) to be paid at the end of the year. The warehouse charges 0.99% of the face value of the loan, payable at the beginning of the year. What is the effective annual rate of this warehousing arrangement?
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To find the effective annual rate EAR of the warehousing arrangement we need to consider both the in...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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