2. Regis Clothiers can borrow from its bank at 14 percent to take a cash discount. The terms of the cash discount are 2/16, net 30.

a.Compute the cost of not taking the cash discount.(Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.)

Cost of not taking a cash discount _________________ %

Should the firm borrow the funds? Yes or no

3. Maxim Air Filters Inc. plans to borrow $252,000 for one year. Northeast National Bank will lend the money at 12 percent interest and requires a compensating balance of 30 percent.

What is the effective rate of interest?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Effective rate of interest _________________ %

4. The treasurer for the Macon Blue Sox baseball team is seeking a $29,900 loan for one year from the 4th National Bank of Macon. The stated interest rate is 19 percent, and there is a 21 percent compensating balance requirement. The treasurer always keeps a minimum of $2,390 in the baseball team's checking accounts. These funds count toward meeting any compensating balance requirements.

What will be the effective rate of interest on this loan?(Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.)

Effective rate of interest _________________ %

5.Simmons Corp. can borrow from its bank at 20 percent to take a cash discount. The terms of the cash discount are 2.5/18, net 90.

a.Compute the cost of not taking the cash discount.(Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.)

Cost of not taking a cash discount _________________ %

Should the firm borrow the funds? Yes or no