Question
You need to borrow money to purchase Holiday inventory.You have a $300,000 line of credit with a 12% compensating balance requirement. The quoted interest rate
You need to borrow money to purchase Holiday inventory.You have a $300,000 line of credit with a 12% compensating balance requirement. The quoted interest rate is 7.5% annually. You need to borrow $200,000 for inventory which you will pay back in exactly one year.How much money do you need to borrow?What is the effective interest rate?
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
8th edition
978-1259569197
