Bejeweled Enterprises received initial proceeds of $984,000 from issuing 120-day commercial paper. The face value of the commercial paper is $1 million. The commercial paper is rolled over every 120 days throughout the year. Use a 365-day year.
a. Calculate the effective annual rate the firm will pay for financing with commercial paper.
b. Suppose a brokerage fee of $8,427 was paid from the initial proceeds. Calculate the effective annual rate the firm will pay for financing with commercial paper