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The Cwazy Wabbit Company needs to borrow $2,000,000 and their bank quoted an interest rate of 4.25% but requires the company to maintain a 5%
The Cwazy Wabbit Company needs to borrow $2,000,000 and their bank quoted an interest rate of 4.25% but requires the company to maintain a 5% Compensating Balance. Calculate the effective interest rate if Cwazy Wabbit borrows the money. 5.45% 12.12% 4.47% 12.55% The daughter of the President of the Cwazy Wabbit Company functions as Manager of Accounts Payable. Their supplier has decided to offer the Trade Credit Terms of 1:15, Net 45. The President's daughter skipped her college class during which the implicit cost of lost Trade Credit was discussed. Since you have attended ALL of the Finance 300 classes, calculate the annualized implicit cost to the company if the terms of the Trade Credit discount are ignored. 2.71% 4.47% 12.12% 13.4%
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