The Row Cannery wants to borrow ($2) million for one month. Using its inventory as collateral, it

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The Row Cannery wants to borrow \($2\) million for one month. Using its inventory as collateral, it can obtain a 12% (APR) loan. The lender requires that a warehouse arrangement be used. The warehouse fee is \($10,000,\) payable at the end of the month. Calculate the effective annual rate of this loan for Row Cannery.

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Fundamentals Of Corporate Finance

ISBN: 9780137852581

6th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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