What Are Compensating Balance and What Effect Does It Have

question 28

Essay

What are compensating balance and what effect does it have on the loan?

Recognize the impact of the time value of money on capital budgeting techniques.

Identify and apply different approaches to capital budgeting including payback, net present value, and internal rate of return methods.

Analyze investment proposals using appropriate financial metrics and tables.

Evaluate the effect of special orders on net income under varying circumstances.