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You are an analyst in the Treasury department of Bennett Inc., a multinational firm. You have been tasked with answering questions the Treasurer has regarding
You are an analyst in the Treasury department of Bennett Inc., a multinational firm. You have been tasked with answering questions the Treasurer has regarding short-term investing and short-term borrowing. Below are numbers that your assistant has researched for you to answer these questions. Discount rate on company's Commercial paper Discount rate on money market securities for investing Dealers annual fee percent on commercial paper Marginal tax rate Yield on Municipal bonds Short-term portfolio beginning of year value Short-term portfolio end of year value Line of Credit with the Bank Interest Rate on bank lending Commitment Fee percentage on line of credit Compensating Balance percentage on line of credit 1.00% 3.00% 0.15% 35% 2.00% 250000.00 257000.00 350,000.00 5% 0.50% 10% QUESTION 12 Suppose that your company wants to negotiate an amount with the new bank that would ensure that the company receives $350,000. Given the compensating balance requirement of 6%, what amount of borrowings would need to be negotiated with the new bank so that the company actually receives $350,000 in borrowings? a. $388,889 O b. $372,340 c. $360,505 d. $408,357
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