2. Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual...
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2. Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual interest rate of 9.5%. The company is required to maintain a 15% compensating balance in its chequing account. What is the annual interest cost on the loan? Assume the company would not normally maintain this average amount. A. 11.18% B. 9.5% C. 15.00% D. 20.00%
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