User Account

All Pages

What is the effective interest rate

Assignment Help Finance Basics
Reference no: EM132842731

A company has a $10,000 line of credit with a bank. The line of credit calls for an interest rate of 10 percent and a compensating balance of 5 percent. This firm needs $5,000 of fund to pay for the inventory.

a) How much does the firm need to borrow from the bank?

b) What is the effective interest rate if the firm uses this line of credit with the compensating balance?

Reference no: EM132842731

Questions Cloud

Explain the four c of traditional credit analysis : As a credit manager, it is very important to evaluate the borrower before sanctioning the loan. Explain the four C's of traditional credit analysis.
Working capital and the cash conversion cycle : Could you please provide a brief statement that presents the elements of the cash conversion cycle and discusses how a company would be able
Discuss the government views in forcing natives to change : Discuss the government's views and motivations in forcing natives to change both their georgaphical locations as well as their ways of life.
Determine the amount the right-of use asset : Determine the amount the right-of use asset and lease liability are initially measured at from the perspective of the lessee
What is the effective interest rate : a) How much does the firm need to borrow from the bank? b) What is the effective interest rate if the firm uses this line of credit with the compensating balan
Give three specific reasons for voting for jackson : Assume you are an eligible voter in 1828 (and if you don't know who's eligible, look into it!). Give three specific reasons for voting FOR Jackson
How did the american economy adapt to war : How did the American economy adapt to war? How did Franklin Roosevelt and A. Philip Randolph address racial discrimination in the workforce?
Calculate the Corporation Tax Liability of Full Tax Co : Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 2020. Using the Barbados Income Tax Act or any other relevant document
Find out financing and investing decisions : Could you please provide a brief statement that discusses one of the four types of Financial Ratios

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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