The case deals about the office supply company in City C. Demand of the firm for cash to pay for inventory is $17,000 per day. The number of working days is given as 305. The annual interest rate is 9%, loan origination fee is $1,200 with 2.25% of the borrowed amount will be charged by the bank. Loan amount must be equal to or greater than $500,000. To determine: The optimal loan amount of the firm.

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Chapter 16, Problem 3.1CP

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The case deals about the office supply company in City C. Demand of the firm for cash to pay for inventory is $17,000 per day. The number of working days is given as 305. The annual interest rate is 9%, loan origination fee is $1,200 with 2.25% of the borrowed amount will be charged by the bank. Loan amount must be equal to or greater than $500,000.

To determine: The optimal loan amount of the firm.

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