Harper Engine Company needs $687,000 to take a cash discount of 1.50/15, net 70. A banker will loan the money for 55 day

[answerhappygod]

Harper Engine Company Needs 687 000 To Take A Cash Discount Of 1 50 15 Net 70 A Banker Will Loan The Money For 55 Day 1 (37.06 KiB) Viewed 25 times

Harper Engine Company Needs 687 000 To Take A Cash Discount Of 1 50 15 Net 70 A Banker Will Loan The Money For 55 Day 2 (39.39 KiB) Viewed 25 times

Harper Engine Company needs $687,000 to take a cash discount of 1.50/15, net 70. A banker will loan the money for 55 days at an interest cost of $20,800. 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 19.65 % b. How much would it cost (in percentage terms) if Harper did not take the cash discount but paid the bill in 70 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 0.98 % c. Should Harper borrow the money to take the discount? O No Yes end up with $687,000? (Round d. If another banker requires a 10 percent compensating balance, how much must Harper borrow t your answer to 2 decimal places.) Amount to be borrowed $ 763,333.00 e-1. What would be the effective interest rate in part d if the interest charge for 55 days were $12,600? (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 13.10 % < Prev 4 of 10 Next >
b. How much would it cost (in percentage terms) if Harper did not take the cash discount but paid the bill in 70 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 0.98 % c. Should Harper borrow the money to take the discount? O No Yes d. If another banker requires a 10 percent compensating balance, how much must Harper borrow to end up with $687,000? (Round your answer to 2 decimal places.) Amount to be borrowed $ 763,333.00 e-1. What would be the effective interest rate in part d if the interest charge for 55 days were $12,600? (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 13.10 % e-2. Should Harper borrow with the 10 percent compensating balance requirement? (There are no funds to count against the compensating balance requirement.) O No Yes