Business, 02.08.2021 21:50 xatziry1717

Summit Record Company is negotiating with two banks for a $104,000 loan. Fidelity Bank requires a compensating balance of 22 percent, discounts the loan, and wants to be paid back in four quarterly payments. Southwest Bank requires a compensating balance of 11 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. The stated rate for both banks is 10 percent. Compensating balances will be subtracted from the $104,000 in determining the available funds in part a. 0-1. Calculate the effective interest rate for Fidelity Bank and Southwest Bank. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
Effective Rate of Interest
Fidelity Bank
Southwest Bank
a-2. Which loan should Summit accept?
Southwest Bank
Fidelity Bank
b. Recompute the effective cost of interest, assuming that Summit ordinarily maintains $22,880 at each bank in deposits that will serve as compensating balances. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
Effective Rate of Interest
Fidelity Bank
Southwest Bank
c. Does your choice of banks change if the assumption in part b is correct?
Yes
Nο

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 17:50

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?

Answers: 1

Answer

Business, 22.06.2019 21:10

This problem has been solved! see the answerthe xyz corporation is interested in possible differences in days worked by salaried employees in three departments in the financial area. a survey of 23 randomly chosen employees reveals the data shown below. because of the casual sampling methodology in this survey, the sample sizes are unequal. research question: are the mean annual attendance rates the same for employees in these three departments? days worked last year by 23 employees department days worked budgets (5 workers) 278 260 265 245 258 payables (10 workers) 205 270 220 240 255 217 266 239 240 228 pricing (8 workers) 240 258 233 256 233 242 244 249 picture click here for the excel data filefill in the missing data. (round your p-value to 4 decimal places, mean values to 1 decimal place and other answers to 2group mean n std. dev variancesbudgets payables pricing total one factor anova source ss df ms f p-value treatment error total

Answers: 2

Answer

Business, 23.06.2019 06:40

Circumstances under which pro-forma invoice may be used

Answers: 1

Answer

Business, 23.06.2019 09:40

When providing the square footage of a property for sale, the salesperson should disclose what?

Answers: 3

Answer

You know the right answer?

Summit Record Company is negotiating with two banks for a $104,000 loan. Fidelity Bank requires a co...