Franklin Company obtained a $160,000 line of credit from State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 1% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Amount Borrowedor (Repaid)Prime Rate forthe Month1-Jan$52,000? 4.0% 1-Feb (21,000)? 4.5% 1-Mar 52,000? 5.0% What is the amount of interest expense recognized in March? (Do not round your intermediate calculations. Round your final answer to the nearest whole number.)
A. $415
B. $277
C. $311
D. $346
Answer: A
You might also like to view...
Smith Corporation is involved in the evaluation of a new computer-integrated manufacturing system. The system has a projected initial cost of $1,000,000 . It has an expected life of six years, with no salvage value, and is expected to generate annual cost savings of $250,000 . Based on Smith Corporation's analysis, the project has a net present value of $57,625. Refer to Smith Corporation. What
is the project's profitability index? a. 1.058 b. .058 c. .945 d. 1.000
The yield curve is downward sloping, or inverted, if the inflation rates are expected to increase.
Answer the following statement true (T) or false (F)
Only a firm's financial decisions affect its stock prices
Indicate whether the statement is true or false
Article 2 of the Uniform Commercial Code does not apply to the sale of services
Indicate whether the statement is true or false