Business, 02.03.2020 18:27 Molly05

(Related to Checkpoint 18.3) (Calculating the cost of short-term financing) You plan to borrow $20 comma 000 from the bank to pay for inventories for a gift shop you have just opened. The bank offers to lend you the money at 14 percent annual interest for the 3 months the funds will be needed (assume a 360-day year). a. Calculate the annualized rate of interest on the loan. b. In addition, the bank requires you to maintain a 14 percent compensating balance in the bank. Because you are just opening your business, you do not have a demand deposit account at the bank that can be used to meet the compensating-balance requirement. This means that you will have to put 14 percent of the loan amount (which you had planned to use to help finance the business) in a checking account. What is the cost of the loan now? c. In addition to the compensating-balance requirement in part b, you are told that interest will be discounted. What is the annualized rate of interest on the loan now? a. The effective rate of interest, or APR, on the loan is nothing%. (Round to two decimal places.) b. If the bank requires you to maintain a compensating balance of 14 percent in the bank, the effective annual cost of the loan now is nothing%. (Round to two decimal places.) c. In addition to the compensating-balance requirement in part b, you are told that interest will be discounted. The effective rate of interest on the loan now is nothing%. (Round to two decimal places.)

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 15:20

Capital financial corporation will lend 90 percent against account balances that have averaged 30 days or less; 80 percent for account balances between 31 and 40 days; and 70 percent for account balances between 41 and 45 days. customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. the current prime rate is 16.50 percent, and capital charges 3.50 percent over prime to charming as its annual loan rate. a. determine the maximum loan for which charming paper company could qualify.

Answers: 1

Answer

Business, 22.06.2019 15:40

As sales exceed the break‑even point, a high contribution‑margin percentage (a) increases profits faster than does a low contribution-margin percentage (b) increases profits at the same rate as a low contribution-margin percentage (c) decreases profits at the same rate as a low contribution-margin percentage (d) increases profits slower than does a low contribution-margin percentage

Answers: 1

Answer

Business, 22.06.2019 21:00

Dozier company produced and sold 1,000 units during its first month of operations. it reported the following costs and expenses for the month: direct materials $ 69,000 direct labor $ 35,000 variable manufacturing overhead $ 15,000 fixed manufacturing overhead 28,000 total manufacturing overhead $ 43,000 variable selling expense $ 12,000 fixed selling expense 18,000 total selling expense $ 30,000 variable administrative expense $ 4,000 fixed administrative expense 25,000 total administrative expense $ 29,000 required: 1. with respect to cost classifications for preparing financial statements: a. what is the total product cost

Answers: 2

Answer

Business, 22.06.2019 23:30

Atelephone call center uses three customer service representatives (csrs) during the 8: 30 a.m. to 9: 00 a.m. time period. the standard service rate is 3.0 minutes per telephone call per csr. assuming a target labor utilization rate of 80 percent, how many calls can these three csrs handle during this half-hour period?

Answers: 1

Answer

You know the right answer?

(Related to Checkpoint 18.3) (Calculating the cost of short-term financing) You plan to borrow $20...

Questions