Compute the annual rate of interest on the loan

Reference no: EM133273886

Question - Brand Advertising is offered a 3/10 net 40 trade discount by its supplier. In the past Brand has been able to get away with paying for supplies on credit in 60 days. Since it doesn't have money on hand to take advantage of the discount, it tries to negotiate a loan with Second Canadian Bank. The amount of $375,000 with a 15% compensating balance and a $5,500 interest charge has been negotiated for the month of May. Brand already maintains a $16,250 balance at the bank.

Required - Compute the annual rate of interest on the loan, and the cost of not taking the discount. Which one should Brand take?

Reference no: EM133273886

Questions Cloud

Elasticity of demand on movie tickets elastic : Peter likes to see movies but he decides that he will spend a fixed amount of $1,000 per month on movie tickets, no matter what the price of per movie ticket is

Write the inverse demand function : Suppose Avinash consumes tea and coffee. His demand for tea is given by qt = m-20pt+20pc, where m is the income, pt is the price of tea, pc is the price of coff

Local example of a government policy : Research a local example of a government policy the limits the amount of competition. Describe the policy and its impact on the market. Is it successful at limi

State what the goal is and why you choose it : MGMT 5330 Texas A&M University, –Central Texas State what the goal is and why you choose it. Which of the leadership models you read about would potentially

Compute the annual rate of interest on the loan : Brand Advertising is offered a 3/10 net 40 trade discount by its supplier. Compute the annual rate of interest on the loan, and the cost of not taking discount

National currency experiences an inflation rate : Assume that the exchange rate is initially in equilibrium. So, the national currency experiences an inflation rate of 2%, while the currency shows 3%.

Draw a new value stream map : MGMT 3830 University of North Texas, Dallas Draw a current state value stream map indicating the customer, supplier, information flow, and relevant metrics

What is meant by off-budget : 1. What is meant by "off-budget" in the United States Summary of Receipts, Outlays, Surpluses and Deficits 1789-2025 schedule?

Challenge for optus causing by the cyberattack : What would be the challenge for Optus causing by the cyberattack and what could be the solutions?

User Account

All Pages