Incurring compensating balance to obtain lower rate

Assignment Help Financial Management
Reference no: EM131913639

What interest rate would make it worthwhile to incur a compensating balance of $18,000 in order to get a 1 percent lower interest rate on a 1 year, pure discount loan of $265,000? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Interest rate % b. Is it worth incurring the compensating balance to obtain the lower rate? Yes No

Reference no: EM131913639

Questions Cloud

Determine the unit contribution margin for each products : Problem - Product pricing and profit analysis with bottleneck operations, Determine the unit contribution margin for each of the three products
What is computer ethics : What is computer ethics and how can the computer aspect place it in a different category when compared to ethics in general?
What is the best way for an expert witness to respond : What tactics can attorneys use to elicit or distort testimony from an expert witness? Describe any three tactics you know of from your readings.
Write a research paper that need investigate person or trend : Write a research paper, that need investigate a particular person, or event or trend of either foreign or indigenous origins that has shaped Shanghai China.
Incurring compensating balance to obtain lower rate : Is it worth incurring the compensating balance to obtain the lower rate?
Object-oriented analysis and design : Why should testing begin with object-oriented analysis and design?
What is the total estimated income from operations : Problem - Differential analysis report involving opportunity costs, If the proposal is accepted, what is the total estimated income from operations
Why are challenges and opportunities unique for cio : Why are challenges and opportunities unique for CIOs in Europe, Middle East and Africa (EMEA)?
What is the value of each firm : Unlevered has no debt and 3.7 million shares outstanding, currently worth $71 per share. Neither firm pays taxes. What is the value of each firm?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd