Question 5 Commercial paper. Criss-Cross Manufacturers will issue commercial paper for a short-term cash inflow. Criss-Cross must raise $5,500,000, and the paper will havea maturity of 182 days. If this paper has a maturity value of $50,000 and is selling at an annual interest rate of 8.3%, what are the proceeds from each paper; that is,what is the discount rate on the commercial paper?What is the discount rate on the commercial paper?% (Round to two decimal places.)What are the proceeds from each paper?$ (Round to the nearest dollar.)

Formula to calculate proceeds from commercial paper: Proceeds = Par value*1/(1+ifor time of issue)

Answered: per? per?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 22P

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