Information about cost of borrowing

Reference no: EM1355012

Pyramid Products Company has a revolving credit agreement with its bank. The company can borrow up to $1 million under the agreement at an annual interest rate of 9 percent. Pyramid is required to maintain a 10 percent compensating balance on any funds borrowed under the agreement and to pay a 0.5 percent commitment fee on the unused portion of the credit line. Assume that Pyramid has no funds in the account at the bank that can be used to meet the compensating balance requirement. Determine the annual financing cost of borrowing each of the following amounts under the credit agreement:

a. $250,000
b. $500,000
c. $1,000,000

Reference no: EM1355012

Questions Cloud

The funds ability to profit : Apex Inc., is a biotechnology company that is about to announce the results of its clinical trials of a potential new cancer drug. If the trials were successful, apnex stock will be worth $70 each share.

Creating organizational alignment : Creating organizational alignment - Explain what role do departments, such as marketing, human resources, and operations management,

Critical and scientific thinking in psychology : What guidelines should be followed to ensure critical and scientific thinking in psychology?

Impact the organizational strengths and weaknesses : Does the external environment impact the organizational strengths and weaknesses?

Information about cost of borrowing : Pyramid Products Company has a revolving credit agreement with its bank. The company can borrow up to $1 million under the agreement at an annual interest rate of 9 percent.

Write program to display company payroll report in list box : Write a program that display a company payroll report in a list box. the program should read each employees name, hourly rate and hours worked from a file and produce a report.

What is the angle of incidence : You are listening a soft music with a sound level of 50 dB. A subway train passes by whose sound level is 90 dB. What is total intensity level of the combined sound in dB.

Different types of organizations : Organizational Impact - Select at least three different types of organizations.

Illustrate what happen to public saving - national saving : illustrate what happen to public saving, national saving and private saving.

User Account

All Pages