Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000. What is the dollar amount...
Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000. What is the dollar amount of interest paid on the commercial paper? What is the effective 120-day rate on the paper?
Homework Answers
Dollar amount of interest paid on the commerical paper=300000-298000=2000
Effective 120-day rate=(300000/298000)-1=0.6711%
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Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000. What is the dollar amount...
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Need help solving this one.
Thank you!
Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 92-day commercial paper with a face value of $1.2 million. The firm has received initial proceeds of $1,176,121. (Note: Assume a 365-day year) What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 92 days throughout the year? b. If a brokerage fee...
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