1. The Pharoah Bank requires borrowers to keep an 7 percent compensating balance. Gorman Jewels borrows $440,000 at a 7 percent stated APR. What is the effective interest rate on the loan? (Round answer to 2 decimal places, e.g. 12.25%.)

2. Sheridan Cosmetics management is setting up a line of credit at the companys bank for $5 million for up to two years. The interest rate is 7.90 percent and the loan agreement calls for an annual fee of 62 basis points on any unused balance for the year. If the firm borrows $2.3 million on the day the loan agreement is signed, what is the effective rate for the line of credit? (Round answer to 2 decimal places, e.g. 12.25%.)

3. Your boss asks you to compute your companys cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $24,800, accounts receivable averaged $18,700, and accounts payable averaged $16,100. You also see that the company had sales of $138,000 and that cost of goods sold was $110,400. Calculate firms cash conversion cycle. (Use 365 days for calculation. Round intermediate calculations and final answer to 1 decimal place, e.g. 15.1.)

The firms cash conversion cycle is ___ days rounded to 1 decimal place days.