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Author Question: Crenshaw Inc. has a $400,000 line of credit with a local bank. The bank requires a compensating ... (Read 425 times)

gbarreiro

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on: May 1, 2019
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?
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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Marked as best answer by gbarreiro on May 1, 2019

flexer1n1

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Reply #1 on: May 1, 2019
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.
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gbarreiro

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Reply 2 on: May 1, 2019
Great answer, keep it coming :)

ghepp

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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