Buraot received from a customer a twelve month, P1,500,000 note bearing annual interest of 8%. After holding the note for half of its life, Buraot suffer financial crisis and drought in cash that lead the company to discount the note to Nocashfund Bank at an effective interest of 10%. The agreement describe as without recourse. What amount of cash does Buraot receive from the bank?
Buraot received from a customer a twelve month, P1,500,000 note bearing annual interest of 8%. After holding the note for half of its life, Buraot suffer financial crisis and drought in cash that lead the company to discount the note to Nocashfund Bank at an effective interest of 10%. The agreement describe as without recourse. What amount of cash does Buraot receive from the bank?
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 19P
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Buraot received from a customer a twelve month, P1,500,000 note bearing annual interest of 8%. After holding the note for half of its life, Buraot suffer financial crisis and drought in cash that lead the company to discount the note to Nocashfund Bank at an effective interest of 10%. The agreement describe as without recourse. What amount of cash does Buraot receive from the bank?
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