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August 31, 2015

Homework Help: Finance

Posted by KEVIN on Wednesday, December 1, 2010 at 7:00am.

Carborundum Metals issues commercial paper with a face value of $1,000,000 and a maturity of three months. Carborundum receives net proceeds of $992,000 when it sells the paper. If the prime rate is 8% APR compounded quarterly, how much savings in interest did Carborundum realize by accessing the commercial paper market?

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