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The Apex Supplies Corporation Needs to Acquire €100 Million in Funds

Question 16

Multiple Choice

The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.The bank has offered them a discounted loan at 10% and a compensating balance of 6%.What is the effective interest rate on this loan?


A) 5.5%
B) 7.8%
C) 11.9%
D) 14.5%

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