The annual effective rate of interest for the Calgon Corp.is 12%.If the cash manager typically invests freed-up funds in overnight investments or uses funds to pay down a credit line on which the company pays daily compounded interest,the appropriate daily opportunity rate for short-term financial decisions would be:
A) 0.12/365
B) (1+ 0.12) / 365
C) [(1+ 0.12) 1/365 - 1]
D) (0.12) 1/365
Correct Answer:
Verified
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