OBJECTIVES: 1. Describe the factors in selecting sources of short-term financing; 2. Identify the sources of short-term financing; and 3. Determine the costs of short-term financing based on sources. T OPIC: SHORT TERM FINANCING Directions: Solve the following II. III. 1. Princess trading ordinarily purchases raw materials amounting to Php 200,000 with the terms 2/15,
Q: Dexter Berhad is acquiring Dusty Berhad. The available information about the companies are as follow...
A:
Q: Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the fo...
A: Let L1 = Long term 1 year rate L2 = Long term 2 year rate L3 = Long term 3 year rate L4 = Long term ...
Q: On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.006 millio...
A: Translation gain or loss is calculated when home currency is translated into terms of another curren...
Q: t Value for the question listed below, while the issue price is correct, I need help understanding h...
A: The price of bond is sum of present value of coupon payments and sum of present value of par value o...
Q: What are deep-in-the money currency options? Why is writing deep-in-the-money currency options tanta...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: (Computing interest tax savings) Returning to Study Problem 15–1, you have now found out in an inves...
A: A shareholder, sometimes known as a stockholder, is a person, corporation, or institution who holds ...
Q: Prepare an amortization schedule for a three-year loan of $93,000. The interest rate is 8 percent pe...
A: Loan amount (PV) = $93000 Interest rate (r) = 8% Number of annual payments (n) = 3
Q: You are comparing two investments. The first pays 3 percent interest per month, compounded monthly, ...
A: a) i) First investment: Rate of interest i =3% per month Number of compounding periods in one half y...
Q: The following information was able from Acer Corporation’s books: 2022 Purchases Sales July ...
A:
Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702...
A: The Capital Asset Pricing Model (CAPM) is a mathematical model that explains the relationship betwee...
Q: Your client has made previous lifetime gifts that have fully exhausted his applicable credit amount....
A: The estates tax is a taxation which is applied by the government when the estates value exceeds a ce...
Q: A man deposits P5,000 at the end of every year earning 7.50% compounded continuously. Determine the ...
A: Annual deposit (P) = P5000 Interest rate = 7.50% e = 2.7182818284590452353602874713527 Annual intere...
Q: A risk-free 1-year 6% coupon bond has YTM=9% while a risk-free 1-year 16% coupon bond has YTM=9.1% F...
A: Bonds are debts instruments that are issued by entities to raise funds and meet their capital requir...
Q: Question 5 3. 1 3 4 EOY 6. 7 8. 9. 10 20 21 22 23 24 25 26 27 28 29 30 CF $300 A2 Аз A4 As Five depo...
A: This can be considered as a case of decreasing annuity in which the annuity amount is declining by 1...
Q: Clfford has X dollars right now. In six years, X will be $3000 if it is invested at 5 percent, compo...
A: Given, the future value of X is $3000 Rate is 5%
Q: In five years, P18,000 will be needed to pay for a building renovation. In order to generate this su...
A: Annuity refers to equal payments made in a fund at regular intervals. The amount so deposited genera...
Q: After-Tax Cash Flows Below is a list of aspects of various capital expenditure proposals that the ca...
A: After-tax cash flows are calculated by adding back non-cash charges such as amortization, restructur...
Q: The Philippine Association of Board Examiners (PABE) desires to award a P1,600 scholarship annually ...
A: To determine up to which year scholarship can be awarded, it is required to calculate the interest e...
Q: Anuonyam plans to deposit GH¢80 in an account at the end of each of the next 20 years. If the accoun...
A: Principal = GH¢80 Time = 20 years Rate = 17% Future value = ?
Q: Which of the following is the most advantageous for a debtor if he borrowed P15, 000 at 6% from Marc...
A: Borrowed amount is P15,000 Interest rate is 6% Starting date is March 15, 2020 Ending date is Decemb...
Q: Suppose a world has two risky assets: StkC and StkD. The following table shows the holding period re...
A: To Find: fifth-percentile value at risk (VaR) of holding StkD
Q: Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm wi...
A: WACC is the weighted average cost of capital . Total capital = $1,708,000 Debt = $750,000 Preferred ...
Q: At the beginning of each quarter, P36,000 is deposited into savings account that pays 6% compounded ...
A: Answer - Compound Interest: = A = P ( 1+ r/n)nt P: the principal, amount invested A: the new ba...
Q: How do I calculate and record the related after tax cash flow effect(s)?
A: FOLLOWING IS THE ANSWER:
Q: Assume we are now in mid- or late February 2022. After conducting your own analysis, you have made a...
A: Behavioral finance is finance that helps in understanding the behavior and mindset of investors in t...
Q: Alpha Ltd wishes to know its overall cost of capital and the management has come to you for assistan...
A: i) Dividend (D) = Sh 5 Share price (P) = Sh 87
Q: 15–10. (Analyzing coverage ratios) The income statements for Lowe's Companies, Inc. (LOW), spanning ...
A: Interest Earned Ration is the ratio which is calculated with the help of Operating Income which is d...
Q: Liam has three other options for purchasing the Charles Street property. In the first scenario, he c...
A: Loan Amount = $1,020,000 Annual Interest Rate = 4.45% Monthly Interest Rate = 0.37% Loan Period in Y...
Q: What is the value of the firm
A: Free Cash Flow: It refers to the amount of money left for the firm after paying all the operating ex...
Q: Explain how wrong calculation of the cost of capital of a project leads to incorrect choice of a pro...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: 9. Money is mvested at 10.5% nommal annual rate. Interested is compounded monthly. How much will $15...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: Mackenzie Company has a price of $31 and will issue a dividend of $2.00 next year. It has a beta of ...
A: Equity refers to that portion of the capital that is funded by the owners of the company. The cost o...
Q: An investment of $600,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depr...
A: To calculate the Net Present Value, the rate to be used will be the nominal rate, which will be calc...
Q: Calculate the total payment for the FHA Purchase Price: $500k LTV: 96.5% Loan term and type: 3...
A: Working Note #1 Purchase Price = $ 500,000 LTV = 96.5% Down payment = 100% - 96.5% = 3.5% Working ...
Q: A BBB-rated corporate bond has a yield to maturity of 6.6%. A U.S. Treasury security has a yield to...
A: Present Value can be calculated using PV function in excel PV (rate, nper, pmt, [Fv], [type]) Rat...
Q: Use the Fisher Effect/equation. A $1,000 Par value, 3% Coupon bond with 10 years to maturity is tra...
A: The Fisher effect states that the nominal interest rate changes with the change in inflation. It is ...
Q: Boulevard Development has 120,000 shares of stock outstanding at a market price per share of $34. Th...
A: Ex-rights stock price = (Market value of shares already issued + Proceeds of new rights issue)/Total...
Q: 29. A man deposits P200 at the beginning of each month in a bank credits savings account with 5% com...
A: We need to use future value of annuity due formula to calculate saving amount at the end of 4 years....
Q: What are the benefits of financial reporting?
A: Financial reporting is a detailed record of all corporate activities, including costs and profits, a...
Q: Bond Pricing. A 30-year-maturity bond with face value of $1,000 makes semiannual coupon payments and...
A: Bonds Bonds are the liabilities of the company which is issued to raise the funds required to financ...
Q: a. What is the price (expressed as a percentage of the face value) of a 1-year, zero-coupon corpo...
A:
Q: What is the present value of a security that promises to pay you $5,000 in 20 years? Assume that yo...
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at t...
Q: Contrast the differences/similarities of common stocks and bonds. How are they used in the corporate...
A: Common Stock: This security represents the ownership of a company. Common stock is also known as a c...
Q: The Rock, Starting exactly eight onths from now they will make their first of 14 monthly payments to...
A: Loans are paid by equated monthly payment that carry the payment of principal and payment of the int...
Q: Aimee invested part of Php35,000 in a stock paying 9% interest for 2 years and the balance in a stoc...
A:
Q: Out of which equation is NOT CORRECT ? Please remember to select "WHICH IS NOT CORRECT" Select one: ...
A: Answer - Total Liabilities = Total Assets - Shareholder's funds - Capital. This equation is incorr...
Q: Auto loan scenario. Vehicle cost 37955. Interest rate is 4% for 60 months.
A:
Q: List each of the key financial statements and identify the kinds of information they provide to corp...
A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts ...
Q: Kameron Gibson's bank statement showed a balance of $1,016.75. Kameron's checkbook had a balance of ...
A: Bank reconciliation statement is prepared to reconcile the bank account balance with financial recor...
Q: An investor currently has all of his wealth in Treasury bills. He is considering investing one-third...
A: Beta: Beta coefficient shows the systematic risk of the assets. In simple words, the beta coefficien...
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
- The XYZ customer service branch maintains a disbursement account which is funded by the main office. The branch needs funds for daily disbursements of P40,000 and a minimum balance of P20,000. The cost to transfer funds from the main office to the branch averages P300. The return on money marketable securities is 5%. XYZ Corporation agreed with its major supplier a credit term of 3/30, n/75. Using 360 days in a year, what would the compound annualize cost of this payable?1. AXN Sdn Bhd needs to raise RM1, 000,000 in short-term loan for five months. loan from OCBC bank at discounted interest rate of 12% per annum and a 20% compensating balance. The present account balance in the company is RM 100,000. Compute the effective cost of financing.2. Mala-Inse Company needs ₱5,000,000 short-term credit for 90 days. To produce the amount, the company intends to sell commercial paper with a discount rate of 15%, issuance cost of ₱75,000 and other flotation cost of ₱15,000. Determine the simple cost of financing? (round to 4 decimal places)
- A firm has applied for working capital finance from a commercial bank. Estimate the working capital requirements. You can add 10% to estimated figures for exigencies. Sales 2,247,000 CoGS 1,637,100 GP 609,900 Admin expenses 149,800 Selling exp 139,100 Profit before tax 321,000 Tax provision 107,000 PAT 214,000 Material used 898,800 Wages and other manf. Exp 668,750 Depreciation 251,450 Less: stock and finished goods (10% product not yet sold) 181,900 The above figures are related to finished goods and not for WIP, 15% of year’s production are in progress on an average requiring full material but only 40% of other expenses. The firm has policy of keeping two months consumption of material in stock. All expenses are paid one month in arrear. Suppliers give one and half month credit, 20% sales are in cash, credit period allowed is two months. 70% of income tax has to be paid in advance.Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate + 1.5%. Yr.1 Yr. 2 Yr. 3 Capital expenditure 250,000 125,000 75,000 Cash dividends 140,000 140,000 140,000 Cash flow from operations before interest expense 750,000 780,000 800,000 Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3? a). 25,000 b). 50,000 c). 45,000 d). 53,000 e). 10,000Hi,how to use the excel function (IRR and Effect) to determine which money lender offers a better rate: 1. Ah Long Finance: Loan amount: $20,000; instalment $600 per month x 36 months 2. Sharky Finance: Loan amount: $30,000; instalment $555 per month x 60 months 3. Ah Beng Finance: Loan amount: 40,000; instalment $ 760 per month x 59 months 4. Barracuda Finance: Loan amount: $50,000; instalment $925 per month x 60 monthsThanks.
- Miracle Bhd requires RM500,000 ti finance its operations. The following short-termresources of financing are available: Alternative I A loan from OCS Bank with simple interest rate of 9 percent per annum for 3 months. A 20 percent compensating balance is required. Alternative II Issue commercial papers at a face value of RM5,000 per paper. The interest is 8 percent per annum for 270 days maturity period. The issuing cost is RM150 per paper. Alternative III A revolving line of credit of RM550,000 for a 1 percent commitment fee on the unused funds and an 8 percent interest rate. i) Calculate the effective interest rate for each alternative. ii) Justify the best alternative for Miracle Bhd.Capita had the following bank loans outstanding during the whole of 20X8: $m 9% loan repayable 20X9 15 11% loan repayable 20Y2 24 Capita began construction of a qualifying asset on 1 April 20X8 and withdrew funds of $6 million on that date to fund construction. On 1 August 20X8 an additional $2 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. A $560,000 B $472,500 C $750,000 D $350,00Company Z purchases a building for $500,000, financed with a mortgage loan of $400,000. Calculate the company's debt-to-assets ratio and comment on the implications for the company's financial leverage.
- The following are relevant information pertaining to the results of the business operations for Maisarah Islamic Window for the year 2020: Income from Operations2600000Expenses from Operations1180000Indirect Income (Fee Based)300000Indirect Expenses260000The above profit from operation is prior to the distribution of profit to mudharabah depositors. The agreed profit sharing ratio between the Bank and mudharabah depositors is 60:40 respectively.Required:Assuming that the Separate Investment Account Method SIAM is used, calculate the net profit/loss to the Islamic Bank (Before Tax and Zakat)The XYZ customer service branch maintains a disbursement account which is funded by the main office. The branch needs funds for daily disbursements of P40,000 and a minimum balance of P20,000. The cost to transfer funds from the main office to the branch averages P300. The return on money marketable securities is 5%. If the entity uses a 250-day year for financial analysis, how much is the optimal cash amount to be requested by the branch each time?Long-Term Financing Needed At year-end 2018, Wallace Landscapings total assets were 2.17 million, and its accounts payable were 560,000. Sales, which in 2018 were 3.5 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to 625,000 in 2018, and retained earnings were 395,000. Wallace has arranged to sell 195,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. a. What were Wallaces total long-term debt and total liabilities in 2018? b. How much new long-term debt financing will be needed in 2019? [Hint: AFN New stock = New long-term debt.)