Answer:
a. AIE will have to borrow $25,5102.04
b. The Effective Rate on this Loan is 6.63%
c. If AIE can convince the bank to remove the compensating balance requirement the effective rate is 6.50%
Explanation:
In order to calculate how much will AIE have to borrow we would have to use the following formula:
Amount to be borrowed = Cost of Truck / (1 - Compensating balance)
Amount to be borrowed = $250000 / (1 - 0.02)
a. Amount to be borrowed = $25,5102.04
In order to calculate the effective rate on this loan we calculate the following:
Effective Rate on this Loan = Interest / Amount received
Effective Rate on this Loan = 16581.63 / 250000
b. Effective Rate on this Loan = 6.63%
c. If AIE can convince the bank to remove the compensating balance requirement the Effective rate = annual rate, hence the effective rate is 6.50%
Answer:
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Explanation:
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Answer:game designer. reason: i love video:games
Explanation:
Answer:
$125
Explanation:
Time value = Premium - Intrinsic value
Premium. = 2 or $200 i.e 2×100
Intrinsic value = 75
= $200 - $75
= $125
Answer: (C) a firm that chooses not to borrow money to invest in new machinery because government borrowing has contributed to high interest rates
Explanation: Due to government's excessive borrowing and spending and a decrease in taxes, this causes a rise in interest rates and leads to crowding out.
