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2. A financial company is going to borrow $5 million for 3 months. The company has...
2. A financial company is going to borrow $5 million for 3 months. The company has three options: A. a commercial bank offering a 5% annual rate loan; B. an insurance firm can provide a 4.4% annual rate discount loan and C. a brokerage can provide a 4% annual rate loan with 8% compensation balance. a) What is the effective annual rate for each option assume that the company has no any deposit in each organization? b) Which option should...
2. A financial company is going to borrow $5 million for 3 months. The company has three options: A. a commercial bank offering a 5% annual rate loan; B. an insurance firm can provide a 4.4% annual rate discount loan and C. a brokerage can provide a 4% annual rate loan with 8% compensation balance. a) What is the effective annual rate for each option assume that the company has no any deposit in each organization? b) Which option should...
2. A financial company is going to borrow $5 million for 3 months. The company has three options: A. a commercial bank offering a 5% annual rate loan; B. an insurance firm can provide a 4.4% annual rate discount loan and C. a brokerage can provide a 4% annual rate loan with 8% compensation balance. a) What is the effective annual rate for each option assume that the company has no any deposit in each organization? b) Which option should...
3. A financial company is going to borrow $4 million for 3 months. The company has three options: A. a commercial bank offering a 6% annual rate loan; B. an insurance firm can provide a 5.5% annual rate discount loan and C. a brokerage can provide a 5% annual rate loan with 15% compensation balance. a) What is the effective annual rate for each option assume that the company has no any deposit in each organization? b) Which option should...
A financial company is going to borrow $4 million for 4 months. The company has three options: A. a commercial bank offering a 6% annual rate loan; B. an insurance firm can provide a 5.7% annual rate discount loan and C. a brokerage can provide a 4.8% annual rate loan with 15% compensation balance. What is the effective annual rate for each option assume that the company has no any deposit in each organization? Which option should the company use...
1. A financial company is going to borrow $4 million for 4 months. The company has three options: A. a commercial bank offering a 6% annual rate loan; B. an insurance firm can provide a 5.7% annual rate discount loan and C. a brokerage can provide a 4.8% annual rate loan with 15% compensation balance. a) What is the effective annual rate for each option assume that the company has no any deposit in each organization? b) Which option should...
Lens Company has variable operating cost of 16 per unit Each of the following question is accounted 10 points. Please show the deta work in order to get full credits. 1. Lens Company has variable operating cost of $16 per unit and sell pri of $25 per unit if company's operating break-even point is 3500 unit: a) What is the fixed operating cost? b) If company produce 5000 units what is company's EBIT? c) Calculate the degree of operating leverage...
1) Your company needs to borrow funds and has several options available to it, Loans A, B and C. The interest rates (APR) for these options are given below. What is the EAR of the loan option the company should choose? Loan A (APR, compounding frequency) 5.95%, semi-annually // Loan B (APR, compounding frequency) 6.02%, monthly // Loan C (APR, compounding frequency) 5.95%, quarterly 2) Your company has an issue of $100 par value annual coupon bonds with 7 years...
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year. Option B: Interest is to be received on a yearly basis and the Principal is to be receivedat the end. All loan repayment items are end-of-year payments. Which options...
Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 17 percent interest Calculate the effective rate of interest for the following types of loans. a. Simple 17 percent interest with a compensating balance of 8 percent (Use a 360-day year. Input your answer as a percent rounde Effective rate of interest 18.48% b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places) Effective...