A company enters into a 3 x 6 FRA with a notional principal of $1 million as the short positio n. The contract has a forward rate of 4%, and LIBOR 5%. At contract settlement, the company will pay: A. $2,500 B. $2,469.14 C. $9,523.81
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11 . A company enters into a 3 x 6 FRA with a notional principal of $1 million as the short positio n. The contract has a forward rate of 4%, and LIBOR 5%. At contract settlement, the company will pay: A. $2,500
B. $2,469.14
C. $9,523.81
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- 11. Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is required to pay 15% interest annually every December 31, from 20A until the principal is extinguished. Client ME has to make an equal annual principal payment of its obligation to commence December 31, 20A. An amount of P61,192 was paid by Client ME as its share from the origination fee totaling P161,192, and the rest was shouldered by the bank resulting to a 14.50% new effective interest rate. On December 31, 20B, how much should AA’s income from this loan?On January 1, 20x1 , ABC Co. enters into a contract with a customer to transfer a license for a fixed fee of P100,000 payable as follows: 20% is payable upon signing of contract. 80% is represented by a note receivable collectible in 4 equal annual installments starting December 31,20x1. The appropriate discount rate is 12%. The license transfers to the customers on January 1, 20x1. ABC Co. incurs direct contract costs of P20,000 on January 1, 20x1. On January 1, 20x1, ABC Co. determines that there is significant uncertainty as to the collectability of the note. The license provides the customer with the right to use ABC's intellectual property as it exists at the point in time at which the license is granted. a. The credit to contract liability on December 31, 20x1, is b. The credit to unearned interest income on December 31, 20x1 is c. The franchise revenue to be recorded in 20x1Suppose a party wanted to enter into an FRA that expires in 42 days and is based on 137-day LIBOR. The dealer quotes a 4.75 percent rate on this FRA. Assume that at expiration the 137-day LIBOR is 4 percent and the notional principal is $ 20,000,000. Calculate the FRA payout for a long position.
- 1.) On November 30, 2022, Loveless Company authorized NBSB Corp. to operate as a franchisee for an initial franchise fee of P1,950,000. Of his amount, P750,000 was received upon signing the agreement, and the balance, represented by a note, is due in four annual payments starting November 30, 2023. Present value of P1 at 12% for 4 periods is 0.6355. Present value of an ordinary annuity of P1 at 12% for 4 periods is 3.0374. The period of refund will elapse on January 31, 2023. The franchisor has performed substantially all the initial services, but the operations of the store have yet to start. Collectability of the note is reasonably certain. Required: a.) How much is the unearned franchise fee on the year ended December 31, 2022?b.) How much is the earned franchise fee for the year ended December 31, 2022?a) Company A agrees to enter into an FRA agreement with Company B in which Company A borrows $ 40,000,000 in 6-month time for a period of 9 months, and Company B invests $ 40,000,000 in 6-month time for a period of 9 months. The 6-month interest rate is 0.77% per annum and the 9-month interest rate is 0.89% per annum. (i). What is the interest rate that both companies agreed upon? (ii). Suppose that at the expiry date of the FRA, the 6-month interest rate is 0.81% per annum and the 9-month interest rate is 0.96% per annum, calculate the compensatory payment and which party receives it? (iii). Suppose that at the expiry date of the FRA, the 6-month interest rate is 0.79% per annum and the 9-month interest rate is 0.86% per annum, calculate the compensatory payment and which party receives it?21. On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189
- 21. On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189 REQUIRED: Provide a step-by-step solution. NOTE: The answer should be the same with the given, I have already asked and they answered 982,144. I need the process that has the answer, P982,189.21. On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1, 20x4 but interests are due annually every January 1. ABC Bank accrued direct loan origination costs of P12,000 and indirect loan origination costs of P8,000. In addition, ABC Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after considering capitalizable cost is 12%. On December 31, 20x3, the carrying value of the loan receivable is approximately The correct answer is: 982,189 REQUIRED: Provide a step-by-step solution.21. A promissory note which is dated January 1, 20A was received from a client for service rendered by the ML Company for P350,000. Its term is 1 year (360 days) and carries with it a 10% interest rate. On the same date, due to financial needs, the company immediately have it discounted to a financial provider at 15% discount. Compute the amount of loss if the discounting arrangement is a conditional sale. Round off final answer to the nearest peso.
- 5.) Chick 2 Go, Inc. charges an initial franchise fee of P115,000, with P25,000 paid when the agreement was signed and the balance in five annual payments. The prevailing interest rate upon signing the contract was 10%. The Franchisee has the option to purchase P15,000 of equipment for P12,000. Chick 2 Go has substantially provided all initial services required and collectability of the payment is reasonably assured. Required:a.) The amount of revenue recognized from the franchise fee was:b.) How much is the balance of receivable after 2 installment payment has been made?15. On January 1, 200A, ABC rendered services to XYZ at a price of P450,000. ABC received P500,000 5-year promissory note from XYZ to be paid in full on December 200E. Assume the use of straight line method to amortized any premium or discount on note receivable, the total amount of income ABC realized from this transaction for 200A would beCompany A agrees to enter into an FRA agreement with Company B in which Company A borrows $ 50,000,000 in 6-month time for a period of 9 months, and Company B invests $ 50,000,000 in 6-month time for a period of 9 months. The 6-month interest rate is 0.75% per annum and the 9-month interest rate is 0.90% per annum. (i).What is the interest rate that both companies agreed upon? (ii).Suppose that at the expiry date of the FRA, the 6-month interest rate is 0.81% per annum and the 9-month interest rate is 0.96% per annum, calculate the compensatory payment and which party receives it?