Borrowing and Compensating Balance
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A) With a compensating balance requirement of 20 percent, how much will the firm need to borrow?
b) Given your answer to part a and a stated interest rate of 9 percent on the total amount borrowed, what is the effective rate on $400,000 actually being used?
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Borrowing and Compensating Balance are investigated.
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Digital Access Inc., needs $400,000 in funds for a project.
a) With a compensating balance requirement of 20 percent, how much will the firm need to ...
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