Problem 8 25 Bank Loan To Take Cash Discount Lo8 1 8 2 Harper Engine Company Needs 647 000 To Take A Cash Discount O 1 (34.31 KiB) Viewed 44 times
Problem 8 25 Bank Loan To Take Cash Discount Lo8 1 8 2 Harper Engine Company Needs 647 000 To Take A Cash Discount O 2 (27.58 KiB) Viewed 44 times
Problem 8 25 Bank Loan To Take Cash Discount Lo8 1 8 2 Harper Engine Company Needs 647 000 To Take A Cash Discount O 3 (28.7 KiB) Viewed 44 times
Problem 8-25 Bank loan to take cash discount [LO8-1, 8-2] Harper Engine Company needs $647,000 to take a cash discount of 2.50/15, net 120. A banker will loan the money for 105 days at an interest cost of $12,500. 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.) Effective rate of interest 15.83 % b. How much would it cost (in percentage terms) if Harper did not take the cash discount but paid the bill in 120 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.) Cost of not taking a cash discount < Prev 6 at 10 Next > Check my work
Help Save & Exit Cost of not taking a cash discount c. Should Harper borrow the money to take the discount? Yes O No d. If another banker requires a 10 percent compensating balance, how much must Harper borrow to end up with $647,000? (Round your answer to 2 decimal places.) Amount to be borrowed Submit Check my work
6 P e-1. What would be the effective interest rate in part d if the interest charge for 105 days were $13.300? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) ebook Effective rate of interest e-2. Should Harper borrow with the 10 percent compensating balance requirement? (There are no funds to count against the compensating balance requirement) Yes No < Prev 6 0 10 Next > Check my work
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