This topic contains a solution. Click here to go to the answer

Author Question: Crenshaw Inc. has a $400,000 line of credit with a local bank. The bank requires a compensating ... (Read 281 times)

gbarreiro

  • Hero Member
  • *****
  • Posts: 566
Crenshaw Inc. has a $400,000 line of credit with a local bank. The bank requires a compensating balance of 10% of the loan and extends credit to Crenshaw at 1% over the current prime rate. Crenshaw needs the use of $200,000 for the three-month period. They currently have no deposits with the lending bank.

a.What will the effective annual cost of this credit be? (Assume a 360-day year and a 9% prime
rate.)

b.Using the above information, what would be the effective interest rate if the firm discounted
the interest on the loan?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by gbarreiro on May 1, 2019

flexer1n1

  • Sr. Member
  • ****
  • Posts: 373
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 35% of students answer this correctly




gbarreiro

  • Member
  • Posts: 566
Reply 2 on: May 1, 2019
Wow, this really help


Zebsrer

  • Member
  • Posts: 284
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

For a complete list of videos, visit our video library