Solved: Effective rate for the line of credit, Finance Basics

+44 141 628 6080
[email protected]

Effective rate for the line of credit

Winegartner Cosmetics is setting up a line of credit at its bank for $5 million for up to two years. The interest rate is 5.875 percent and the loan agreement calls for an annual fee of 40 basis points on any unused balance for the year. If the firm borrows $2 million on the day the loan agreement is signed, what is the effective rate for the line of credit?

Solution Preview :

Prepared by a verified Expert

Finance Basics: Effective rate for the line of credit

Reference No:- TGS0558030

Now Priced at $10 (50% Discount)

Recommended (98%)

Rated (4.3/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : How much is the total manufacturing cost per unit

In applying the high-low method, which months are relevant?Sales are $500,000 and variable costs are $400,000. What is the contribution margin ratio?

Q : Explain cash paid to retire bonds in statement of cash flows

In what section of the statement of cash flows would you find cash paid to retire bonds? In what section would you find cash paid for interest?

Q : What is the harm of adjusting the timing of the sales

You are new accountant at the company and your boss orders you to backdate several sales invoices so that the sales are recognized in the previous fiscal year and not the current year.

Q : Which is better indicator debt-to-equity and times interest

The debt-to-equity and times interest earned ratios. Which is a better indicator of a company's ability to meet its required interest payment? Explain.

Q : Effective rate for the line of credit

Q : At what amount trading be reported on the balance sheet

At what amount should trading, available-for-sale, and held-to-maturity securities be reported on the balance sheet.

Q : Question regarding the cash conversion cycle

It also knows that the company has days' sales in inventory of 64 days and days' sales outstanding of 32 days. How does Wolfgang's cash conversion cycle compare with the industry average of 75 days?

Q : Compute the net assessable income for years of assessment

Mr. Man returned to Hong Kong for a total of 70 days, being 7 days on holiday and 63 days on business for his employer. AB Ltd provided him with a flat in Hong Kong and one room in a hotel in Singapore.

Q : Explain the completion of the darby department store audit

The president believes that diversity in accounting practice will always exist among independent entities despite continual improvements in comparability.

1952027

Questions
Asked

3,689

Active Tutors

1447604

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: Effective rate for the line of credit

Reference No:- TGS0558030

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : How much is the total manufacturing cost per unit

Q : Explain cash paid to retire bonds in statement of cash flows

Q : What is the harm of adjusting the timing of the sales

Q : Which is better indicator debt-to-equity and times interest

Q : Effective rate for the line of credit

Q : At what amount trading be reported on the balance sheet

Q : Question regarding the cash conversion cycle

Q : Compute the net assessable income for years of assessment

Q : Explain the completion of the darby department store audit

What is a behavioral indicator related to family

Why you feel unpleasantly hot and sweaty

Problem on journal articles and non-journal materials

Identify one antecedent, one behaviour, and one consequence

Is lifespan psychologists are unlikely to investigate

Provide reasons why working from a person centred

Describe the results, including any scores

Solution Preview :

Prepared by a verified Expert

Finance Basics: Effective rate for the line of credit

Reference No:- TGS0558030

Recent Questions Asked Finance Basics

Q : How much is the total manufacturing cost per unit

Q : Explain cash paid to retire bonds in statement of cash flows

Q : What is the harm of adjusting the timing of the sales

Q : Which is better indicator debt-to-equity and times interest

Q : Effective rate for the line of credit

Q : At what amount trading be reported on the balance sheet

Q : Question regarding the cash conversion cycle

Q : Compute the net assessable income for years of assessment

Q : Explain the completion of the darby department store audit

Asked Questions