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21. A bank requires 5% compensating balance on business loans and usually requires 1% per month...
Kerry Corporation must pay $500,000 to its supplier. Kerry's bank has offered a 270-day simple interest...
Kerry Corporation must pay $500,000 to its supplier. Kerry's bank has offered a 270-day simple interest loan with a quoted interest rate of 12 percent. The bank requires a 20 percent compensating balance requirement on business loans. If Kerry currently holds no funds at the lending bank, what is the loan's effective annual rate (rEAR)? In your computations, assume there are 360 days in a year.
1 IJA bank currently charges 10% interest compounded annually on business loans. If the bank were...
1 IJA bank currently charges 10% interest compounded annually on business loans. If the bank were to charge continuous compounding, what would be the annual effective interest rate? a)10% b.) 10.517% c.) 12.5% d.) 12.649% e.) infinite 3.) How large a contribution is required to endow perpetually a research laboratory which requires $50,000 for original construction, $20,000/yr operating expenses and $10,000 every three years for new and replacement equipment? Interest is 4%. a.) $70,000 b.) $640,000 c.) $790,000 d.)$1,000,000 e.)...
Which of the following best describes the benefits to the borrower of selling asset-backed securities? Due...
Which of the following best describes the benefits to the borrower of selling asset-backed securities? Due to the portfolio effect, the borrower can package up low-quality accounts receivable and sell them for a premium price. The borrower trades future cash flows for current cash flows. The asset-backed security is likely to carry a high credit rating of AA or better. The borrower trades future cash flows for current cash flows and the asset-backed security is likely to carry a high...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on these assets. The ratio of total debts to total assets (or DR been set at 50 percent. The interest rate on short-term debt is 7 percent, while the interest rate on long-term debt is 10 percent. A conservative policy calls for only long-term debt with no short-term debt; an intermediate policy calls for 50 percent short-term debt and 50 percent long-term debt; and an...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1)...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The LM curve represents A) the single level of output where the goods market is in equilibrium. B) the combinations of output and the interest rate where the goods market is in equilibrium. C) the single level of output where financial markets are in equilibrium. D) the combinations of output and the interest rate where the money market is in equilibrium. E) none of...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The LM curve represents A) the single level of output where the goods market is in equilibrium. B) the combinations of output and the interest rate where the goods market is in equilibrium. C) the single level of output where financial markets are in equilibrium. D) the combinations of output and the interest rate where the money market is in equilibrium. E) none of the...
Please read the article and answer about questions. You and the Law Business and law are...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...
1. When it comes to financial matters, the views of Aristotle can be stated as:...
1. When it comes to financial matters, the views of Aristotle can be stated as: a. usury is nature’s way of helping each other. b. the fact that money is barren makes it the ideal medium of exchange. c. charging interest is immoral because money is not productive. d. when you lend money, it grows more money. e. interest is too high if it can’t be paid back. 2. Since 2008, when the monetary base was about $800 billion,...
The rest of the details: Gadgets, Inc. is incorporated and will begin operations on January 1, 2019. Its primary...
The rest of the details:
Gadgets, Inc. is incorporated and will begin operations on January
1, 2019. Its primary business is the manufacture and sale of
gadgets. Because cash resources are limited, the company
anticipates the need to have access to capital during the first
year of operations and seeks to establish a line of credit with a
local bank. The bank requires a complete operating and cash budget
and pro-forma financial statements for 2019 as part of the loan...
ABC International: Solving the Rural Barrier
Compensation sessionABC International: Solving the Rural BarrierSource: Thunderbird School of Global Management, A unit of the Arizona State University Knowledge Enterprise. 2015. This case was prepared by Erin Bell under the guidance and supervision of Dr. Amanda Bullough, and revised and updated by Drew Helm for the purpose of classroom discussion only, and not to indicate either effective or ineffective managementSiham sat with her family and childhood friend, Leila, in their rural village of Qabatiya, Palestine. Leila had recently returned from...
1 IJA bank currently charges 10% interest compounded annually on business loans. If the bank were to charge continuous compounding, what would be the annual effective interest rate? a)10% b.) 10.517% c.) 12.5% d.) 12.649% e.) infinite 3.) How large a contribution is required to endow perpetually a research laboratory which requires $50,000 for original construction, $20,000/yr operating expenses and $10,000 every three years for new and replacement equipment? Interest is 4%. a.) $70,000 b.) $640,000 c.) $790,000 d.)$1,000,000 e.)...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on these assets. The ratio of total debts to total assets (or DR been set at 50 percent. The interest rate on short-term debt is 7 percent, while the interest rate on long-term debt is 10 percent. A conservative policy calls for only long-term debt with no short-term debt; an intermediate policy calls for 50 percent short-term debt and 50 percent long-term debt; and an...
The rest of the details:
Gadgets, Inc. is incorporated and will begin operations on January
1, 2019. Its primary business is the manufacture and sale of
gadgets. Because cash resources are limited, the company
anticipates the need to have access to capital during the first
year of operations and seeks to establish a line of credit with a
local bank. The bank requires a complete operating and cash budget
and pro-forma financial statements for 2019 as part of the loan...
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