Question
4) A firm has a $4 million credit line to borrow at the prime rate (9%). Terms require a 10% compensating balance on borrowed funds
4) A firm has a $4 million credit line to borrow at the prime rate (9%). Terms require a 10% compensating balance on borrowed funds and a 0.5% commitment fee on the unused balance. Average borrowings during the year are expected to be $2 million. The firm has $100,000 on deposit at the bank. Calculate the EAR.
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Horngrens Accounting
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
12th edition
9780134487151, 013448715X, 978-0134674681
