Question: Explain why the operating and cash cycles are important to a company and what can an organization do to improve? (3 marks) (c) First National

Explain why the operating and cash cycles are important to a company and what can an organization do to improve? (3 marks)

(c) First National Bank has granted Palladium Ltd., a line of credit that allows it to borrow up to $50 million at any time. The interest rate is 0.54% per month. But Palladium Ltd. is required to have 5.3% of the borrowed amount deposited in a non-interest-bearing account. Assume the bank uses compound interest on its line of credit loans, what is the effective annual interest rate on this lending arrangement? (7 points)

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