Determine the annual financing cost of the loan

Assignment Help Financial Management

Reference no: EM131336658

1. The Pulaski Company has a line of credit with a bank under which it can borrow funds at an 8 percent interest rate. The company plans to borrow $100,000 and is required by the bank to maintain a 15 percent compensating balance. Determine the annual financing cost of the loan under each of the following conditions:

a. The company currently maintains $7,000 in its account at the bank that can be used to meet the compensating balance requirement.

b. The company currently has no funds in its account at the bank that can be used to meet the compensating balance requirement.

Reference no: EM131336658

Questions Cloud

Determine the annual financing cost of forgoing : Determine the annual financing cost of forgoing the cash discount if the credit terms are "1/10, net 30" and the invoice is not paid until it is 20 days past due.

Discuss the competing constitutional rights of persons : In this course we discussed at length the issue of governmental regulation of abortion in the United States, Canada and Germany. For each nation (the United States, Canada and GermanY) and citing to the materials we have covered in this course, pl..

What is the overall cost of capital for the firm : You are analyzing the cost of capital for a firm that is financed with 300 million of equity and 200 million of debt. The cost of debt capital for the firm is 9 percent, while the cost of equity capital is 19 percent. What is the overall cost of capi..

How many heavy equipment operators were employed : An employment agency specializing in temporary construction help pays heavy equipment operators $133 per day and general laborers $94. If thirty seven people were hired and the payroll was $4141, how many heavy equipment operators were employed? h..

Determine the annual financing cost of the loan : Determine the annual financing cost of the loan under the company currently maintains $7,000 in its account at the bank that can be used to meet the compensating balance requirement.

Analyze this case using timmons entrepreneurship framework : Analyze this case using the timmons entrepreneurship framework (entrepreneur-opportunity -resources). particularly note the entrepreneur"s traits and how he gathered resources for his venture.

Identify specific details to prepare and submit a proposal : Identify specific details to prepare and submit a proposal for the upgraded class. Using the "Final Project Proposal Template" from the Learning Resources, your proposal must include the following items.

What annuity payment must jeremy make : If the annuity requires that Jeremy make monthly investments, what annuity payment must Jeremy make to save $10,000?

Explain the process of finding your article : The article is an issue that is important and related to your health field (PUBLIC HEALTH). Explain the process of finding your article and how you determined it was peer-reviewed. NOTE: ARTICLE WAS FOUND IN SCHOOLS LIBRARY DATABAS

User Account

All Pages