Neveready Flashlights Inc. needs $324,000 to take a cash discount of 2/15, net 73. A banker will loan the money for 58 days at an interest cost of $11,100.

a.What is the effective rate on the bank loan?(Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

b.How much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 73 days instead of 15 days?(Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

c.Should the firm borrow the money to take the discount?

NoYes

d.If the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $324,000?

e-1.What would be the effective interest rate in partdif the interest charge for 58 days were $16,700?(Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

e-2.Should the firm borrow with the 20 percent compensating balance requirement? (The firm has no funds to count against the compensating balance requirement.)

YesNo