If the loan amount is $100,000, interest is discounted (advance), a 1% commitment fee is paid upfront,

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If the loan amount is $100,000, interest is discounted (advance), a 1% commitment fee is paid upfront, and a 9% make-up balance is required, what is the effective cost of bank financing? The stated interest rate is 8%.

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Essentials of Managerial Finance

ISBN: 978-0324422702

14th edition

Authors: Scott Besley, Eugene F. Brigham

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Posted Date: Jan 06, 2024 10:27 AM

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If the loan amount is $100,000, interest is discounted (advance), a 1% commitment fee is paid upfront,

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Introduction The effective cost of bank financing takes into account various components such as the stated interest rate commitment fee and makeup bal... View the full answer

Essentials of Managerial Finance

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