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5. A corporation obtains a loan of P200,000 at an annual rate of 12%. The corporation must keep a compensating balance of 20% of any

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5. A corporation obtains a loan of P200,000 at an annual rate of 12%. The corporation must keep a compensating balance of 20% of any amount borrowed on deposit at the bank, but norm ally does not have a cash balance account with the bank. What is. the effective cost of the loan? A. 12.0% B. 13.3% C. 15.0% D. 16.0%

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