19. The treasurer of Pharmally Manufacturing Company is faced with three alternative bank loans. The firm wishes to select the one that minimizes its cost of credit on a P200,000 note that it plans to issue in the next 10 days. relevant information for the three loan configurations is as follows: A. An 18% rate of interest with interest paid at the end of the loan period and no compensating balance requirement. B. A 16% rate of interest and a 20% compensating balance requirement. this loan also calls for interest to be paid at the end of the loan period. C. A 14% rate of interest that is discounted plus a 20% compensating balance requirement. What is the effective cost of credit of Alternative B?
19. The treasurer of Pharmally Manufacturing Company is faced with three alternative bank loans. The firm wishes to select the one that minimizes its cost of credit on a P200,000 note that it plans to issue in the next 10 days. relevant information for the three loan configurations is as follows:
A. An 18% rate of interest with interest paid at the end of the loan period and no compensating balance requirement.
B. A 16% rate of interest and a 20% compensating balance requirement. this loan also calls for interest to be paid at the end of the loan period.
C. A 14% rate of interest that is discounted plus a 20% compensating balance requirement.
What is the effective cost of credit of Alternative B?
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