Randall Corporation plans to borrow $233,000 for one year at 20 percent from the Waco State Bank There is a 21 percent compensating balance requirement Randall Corporation keeps minimum transaction balances of $17,500 in the normal course of business This idle cash counts toward meeting the compens...

Randall Corporation plans to borrow $233,000 for one year at 20 percent from the Waco State Bank.

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Randall plans to borrow $233,000 for one year at 20 percent from the Waco State Bank. There is a 21 percent compensating balance requirement. Randall keeps minimum transaction balances of $17,500 in the normal course of business. This idle cash counts toward meeting the compensating balance requirement. What is the effective rate of interest?

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A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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Related Book For book-img-for-question

Foundations of Financial Management

ISBN: 978-1259194078

15th edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

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Question Posted: Oct 14, 2014 07:24 AM

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Randall Corporation plans to borrow $233,000 for one year at 20 percent from the Waco State Bank.

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Randall Corporation Effective rate of interest Required ...View the full answer

Foundations of Financial Management

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