Essay
Queue de Castor Company is being offered a one-year $1.45 million operating line of credit at a rate of 5.75%.There is a monthly 0.5% commitment fee on the unused amount.The firm borrows only $0.5 million during the first 8 months of the loan and reduces its loan by a further $0.2 million for the remaining 4 months.What is the effective annual cost (in percent)of this loan arrangement?
Correct Answer:
Verified
Interest (months 1 to 8)= $500,000 * 0.0...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q3: An important tool used in assessing the
Q4: A firm may hold a large amount
Q5: The precautionary motive refers to:<br>A)a firm's motive
Q6: The economic order quantity (EOQ)model of inventory
Q7: If the current credit policy is 3/30
Q9: Firms implement centralized systems with respect to
Q10: Which of the following is considered as
Q11: Under which scenario does the economic order
Q12: Which of the following pairs does not
Q13: The most common benchmark used for pricing