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Planning: -Assume you have a $400,000 bank line of credit with a 20 percent compensating balance requirement. The quoted interest rate associated with your line

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Planning: -Assume you have a $400,000 bank line of credit with a 20 percent compensating balance requirement. The quoted interest rate associated with your line of credit is 8.50 percent. You need to borrow $150,000 for one year for the purchase of raw materials. How much actually do you Need to Borrow given the Compensating Balance Requirement, and how much Interest are you effectively paying

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