Neveready Flashlights Inc Needs 324 000 To Take A Cash Discount Of 2 15 Net 73 A

Neveready Flashlights Inc. needs $324,000 to take a cash discount of 2/15, net 73. A banker will loan the money for 58 days at an interest cost of $11,100.  

a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

b. How much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 73 days instead of 15 days? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

c. Should the firm borrow the money to take the discount?

NoYes  

d. If the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $324,000?

e-1. What would be the effective interest rate in part d if the interest charge for 58 days were $16,700? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

e-2. Should the firm borrow with the 20 percent compensating balance requirement? (The firm has no funds to count against the compensating balance requirement.)

YesNo

Stuck With A Lot Of Homework Assignments And Feeling Stressed ? Take Professional Academic Assistance & Get 100% Plagiarism Free Papers

Get Help By Expert

For students who are struggling with essay writing, we can be a lifesaver. We offer essay writing help for students of all levels, from elementary school to college. Our team of experienced assignment writers can help you with any type of essay, from persuasive essays to comparative essays. So if you're struggling with essay writing, don't hesitate to contact us for assistance.

Answer

Looking For Plagiarism Free Answers For Your College/ University Assignments.