The Clarkson Designer Company wants to borrow $750,000. The bank will provide the loan at an APR
Question:
The Clarkson Designer Company wants to borrow $750,000. The bank will provide the loan at an APR of 6.875. Since the loan calls for a compensating balance, the effective interest rate is actually 9.25 percent. What is the compensating balance on this loan?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 64% (14 reviews)
Amount to be borrowed 750000 Stated annual interest rate 687...View the full answer
Answered By
Stephen ouma
I have worked with different academic writing companies such as wriredom, writerbay, and Upwork. While working with these companies, I have helped thousands of students achieve their academic dreams. This is what I also intend to do here in SolutionInn
4.90+
19+ Reviews
63+ Question Solved
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Question Posted:
Students also viewed these Corporate Finance questions
-
A credit card offers financing at an APR of 18 percent, with monthly compounding on outstanding charges. What is the effective annual rate (EAR)?
-
Harold borrowed $8,000 for five years at an APR of 6.75%. a. What is Harold's monthly payment? b. What is the total amount that Harold paid in monthly payments for the loan? c. What is the amount...
-
Morgan Contractors borrowed $1.75 million at an APR of 10.2 percent. The loan called for a compensating balance of 12 percent. What is the effective interest rate on the loan?
-
Suppose a parent was earning $20,000 per year working at a local firm. The parent then decides to quit his job in order to care for his child, who was being watched by a babysitter for $10,000 per...
-
Warner Clothing is considering the introduction of a new baseball cap for sales by local vendors. The company has collected the following price and cost characteristics: Sales price. . . . . . . . ....
-
In Exercises use logarithmic differentiation to find dy/dx. y = (x - 2) x+1
-
Discuss the reasons why almost all colonies had achieved independence by the end of the 1960s.
-
1. Did Porters statement that the spa was top of the line and the Cadillac of spas create any type of warranty? Why or why not? 2. Did Porter breach the implied warranty of merchantability? Why or...
-
The Miller Family Budget 20%5%20%35%20%Food20%Entertainment5%Utilities20%Savings20%Housing35% Data Percentage Food 0.2 Entertainment 0.05 Utilities 0.2 Savings 0.2 Housing 0.35 If the Milller's spend...
-
Consider a single sampling plan with a lot size of 1500, sample size of 150, and acceptance number of 3. Construct the OC curve. If the acceptable quality level is 0.05% nonconforming and the...
-
Longhorn Traders is one of the largest RV dealers in Austin, Texas, and sells about 2,800 recreational vehicles a year. The cost of placing an order with Longhorns supplier is $800, and the inventory...
-
The Colonial Window Treatments Company is borrowing $1.5 million. The loan requires a 10 percent compensating balance, and the effective interest rate on the loan is 9.75 percent. What is the stated...
-
If beginning inventory is $200 and purchases are $800, which of the following could be true? a. Ending inventory is $400 and Cost of Goods Sold is $600. b. Ending inventory is $800 and Cost of Goods...
-
Describe the significance of constraints and how they relate to business rules.
-
Describe the difference between concrete and abstract classes and give an example for each.
-
Explain the role of parameters and return values in exchanging messages.
-
Explain parameters and return values in the framework of messages. Provide examples.
-
The table shows experimental values of the variables x and y. The variables are known to be related by the equation y = 10 a b x , where a and b are constants. a. Draw the graph of lg y against x....
-
List three different effects that relate to PT and how each effect can cause investors to make irrational decisions.
-
Given the table below, about how much force does the rocket engine exert on the 4.0 kg payload? Distance traveled with rocket engine firing (m) Payload final velocity (m/s) 500 320 490 310 1020 450...
-
Solve the following differential equation problems: (a) d.x dt dx (b) + 2tx=(t)e, x(0) = 1 dt (d) -2x = 1, x(0) = 2 dx (c) + 3x = e, x(0) = 2 dt d.x dt + x sint sint, x(T) = e
-
Consider this simplified balance sheet for Geomorph Trading: a. What is the company's debt-equity ratio? b. What is the ratio of total long-term debt to total long-term capital? c. What is its net...
-
Chik's Chickens has average accounts receivable of $6,333. Sales for the year were $9,800. What is its average collection period?
-
Old Time Savings Bank pays 4% interest on its savings accounts. If you deposit $ 1,000 in the bank and leave it there a. How much interest will you earn in the first year? b. How much interest will...
-
Implement the definition of the function rotate ToLeft(), member of the DArray class, so that it rotates all the elements of the array object to the left by one position. Example: [6, 2, 5, 3] [2, 5,...
-
Write the definition of the of the function is Full() as a member function of the DArray class. The function returns true if the array is full, or false otherwise. Functions.cpp 1 #include "DArray.h"...
-
Write a program that will calculate the trajectory of a golf ball thrown with a velocity of 25.6 m/s at an angle of 0 = 35 relative to the horizontal, from a hill that is 2.1 meters above the ground...
Study smarter with the SolutionInn App