Harold Corporation needs to borrow 1,000,000 in order to take a cash discount from its supplier on credit terms 3/10, net 45 . A banker will loan the money for 30 days at an interest cost of 28,000. Assume a 360 -day year for your calculations. Instructions: 3.1 What is the effective rate on the bank loan? (5 points) 3.2 How much would it cost (in percentage terms) if Harold did not take the cash discount, but paid the bill in 45 days instead of 10 days? (5 points) 3.3 Should Harold borrow the money to take the discount? Explain. (5 points) 3.4 If another banker requires a 15 percent compensating balance, how much must Harold borrow to end up with 1,000,000 ? (5 points) 3.5 What would be the effective interest rate in question 3.4 if the interest charge for 30 days were 21,000 ? Since there are no funds to count against the compensating balance requirement, should Harold borrow with the 15 percent compensating balance? (5 points) CASE 4 (10 points) You are just hired as a Credit Manager for a big company. Your job is to effectively manage accounts receivable, at the same time building sound relationships with the customers. Instructions: Explain how you are going to achieve your job tasks successfully. In your answer, you should explain how you gather credit information, establish an optimal credit policy, perform credit analysis of new and repeating customers, and set up a collection policy. (10 points)