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1. Use the following assumptions to determine the determine the collected balance that would be required to offset a monthly service charge of $400:
Ledger Balance =$300,000
Deposit Float =$100,000
Monthly Earnings Credit =$165
Days in Month = 30 days
Reserve Requirement Ratio = 10%
a. 1.12%
b. 112%
c. 1.56%
d. 0.011%
e. 2.35%
2. Trade credit terms of 2/10 net 60 are offered. What is the annualized cost of missing the trade credit discount?
a. 25.09%
b. 2.04%
c. 14.90%
d. 37.24%
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