Determine effective borrowing rate

Reference no: EM1359258

Question 22
What is the effective borrowing rate for a 1-year line of credit, if the total credit line = $3,000,000, average loan outstanding = $1,400,000, commitment fee = 0.5% on the unused portion, and interest rate = LIBOR + 1.5% (LIBOR is currently 6.25%)? There are no compensating balances, and the year basis is 365 days.

a. 7.58%
b. 8.21%
c. 8.25%
d. 8.32%
e. 8.77%

Question 25
Fickle Sickles collects 25,000 checks per 365-day year with average amount $180 and total delay 4 days. A lockbox system would reduce that delay to 2 days, and it would also reduce FISI's check processing costs by $.01 per check. The annual fee on the lockbox would be $2500. What is the annual net benefit associated with using the lockbox? FISI has an 8% cost of capital.

a. - $777
b. - $277
c. $551
d. $603
e. $1695

Reference no: EM1359258

Questions Cloud

Explain suggest two types of training that a company : Explain Suggest two types of training that a company would provide for newly hired employees into a software development position

Determine the optimal order quantity : Barneycle's Boat Shop sells 3000 of its glow in the dark boats each year and has fixed order costs of 120 each order. Carrying cost per boat is $150 per year. Determine the optimal order quantity for these boats?

How many electrons pass through the light bulb : Four particles are held in place at the corners of a square with sides of length L. Each particle has a charge q and mass m. (a) What is the potential energy of the system of charges.

Children and adolescents with cultural competency : Explain how you would work with children and adolescents with cultural competency.

Determine effective borrowing rate : Determine effective borrowing rate for a 1-year line of credit, if the total credit line = $3,000,000, average loan outstanding = $1,400,000, commitment fee = 0.5 percent on the unused portion,

Influence of alcohol and possession of marijuana : Tony was a 16-year-old juvenile who was picked up for driving under the influence of alcohol and possession of marijuana. He was evaluated and taken to juvenile detention.

What is the resulting compressional force on the earth : What is the resulting compressional force on Earth. Two loudspeakers, A and B, are driven by the same amplifier and emit sinusoidal waves in phase.

Net operating losses : To what years can the 2008, 2011 and 2012 net operating losses be carried back? What amount, if any, is available as a net operating loss to be carried forward?

Explain due to a growing us economy to overall market demand : Explain due to a growing US economy, the overall market demand for nails will increase by 2%. Based on this information, should you plan to increase or decrease your production of nails.

User Account

All Pages