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Neveready Flashlights Inc. needs $359,000 to take a cash discount of 3/18, net 72. A banker will loan the money for 54 days at an
Neveready Flashlights Inc. needs $359,000 to take a cash discount of 3/18, net 72. A banker will loan the money for 54 days at an interest cost of $14,500.
d. If the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $359,000? Amount to be borrowed I% e-1. What would be the effective interest rate in part d if the interest charge for 54 days were $15,900? (Use a 360-day year. Do not round intermediate calculations Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest 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.) Yes NoStep by Step Solution
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