Business Book Publishing needs to borrow $800,000 in order to finance its new inventory. Two banks they were considering offered different annual loan terms: Marine Bank offered a 7% loan with a 15% compensating balance to be paid back in quarterly payments. McLean National Bank offered Business Book Publishing a 8.25% loan to be paid back semi-annually. Which loan terms should Business Book Publishing take?
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Take McLean's offer. Even though it has...View Answer
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