2B5DD KELLER PRODUCTS NEEDS $150,000 OF ADDITIONAL FUNDS OVER THE NEX...
181.
CSO: 2B5f
LOS: 2B5dd
Keller Products needs $150,000 of additional funds over the next year in order to satisfy a
significant increase in demand. A commercial bank has offered Keller a one-year loan at
a nominal rate of 8%, which requires a 15% compensating balance. How much would
Keller have to borrow, assuming it would need to cover the compensating balance with
the loan proceeds?
a.
$130,435.
b.
$172,500.
c.
$176,471.
d.
$194,805.