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- Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.Halliday Inc. receives a $2 million payment once a year. Of this amount, $700,000 is needed for cash payments made during the next year. Each time Halliday deposits money in its account, a charge of $2.00 is assessed to cover clerical costs. If Halliday can hold marketable securities that yield 5 percent, and then convert these securities to cash at a cost of only the $2 deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to the Baumol model?
- Bowl Corporation has obtained a line of credit facility of $1 million from Plate Bank at 6% interest per annum to meet its $900,000 capital requirement. The capital is needed by Bowl Corporation for 100 days. The bank requires a 2% commitment fee and $50,000 compensating balance. Compute the amount of interest that has to be paid by Bowl Corporation to the bank for the line of credit.Atlas Moving and Storage wants to have enough money to purchase a new tractor-trailer in 4 years at a cost of $290,000. If the company sets aside $4000 in month 1 and plans to increase its set aside by a uniform amount each month, how much must the increase be provided the funds earn 6% per year compounded monthly?A group of private investors borrowed $30 million to build 300 new luxury apartments near a large university. The money was borrowed at 6% annualinterest, and the loan is to be repaid in equal annual amounts (principal and interest) over a 40-year period. Annual operating, maintenance, and insurance expenses are estimated to be $4,000 per apartment, and theseexpenses are incurred independently of the occupancy rate for the apartments. The rental fee for each apartment will be $12,000 per year, and the worst-case occupancy rate is projected to be 80%. Solve, a. How much profit (or loss) will the investors make each year with 80% occupancy? b. Repeat Part (a) when the occupancy rate is 95%.
- Sandhill Productions borrowed some money from the California Finance Company at a rate of 15.30 percent for a seven-year period. The loan calls for a payment of $1,641,000 each year beginning today. How much did Sandhill borrow? (Round factor values to 4 decimal places, e.g. 1.5214 and final answer to nearest whole dollar, e.g. 5,275.) Sandhill borrowed $A company has decided to issue a 120-day bank-accepted bill to raise additional funding of $250 000 to buy equipment. If the bank has agreed to discount the bill at a yield of 7.65% per annum, what will be the face value of the bill?Friedman Roses Inc. needs $65,000 in funds for expansion. With a compensating balance requirement of 20% how much will the firm need to borrow
- e investment group borrows $20,000 from a CRDB bank at a 9% annual interest rate in order to buy a machine. In addition. The company pays a $200 loan origination fee when the loan commences. The CRDB bank offers two repayment plans, one with equal payments made at the end of every year for the next five years and the other with a single payment made after the loan period of five years. a)Draw cash flow diagram. b)Describe the repayment plans as required by the CRDB Bank. please do not provide handwritten solutionVan Buren Resources Inc. is considering borrowing $120,000 for 168 days from its bank. Van Buren will pay $7,000 of interest at maturity, and it will repay the $120,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual financing cost. Round your answer to two decimal places. % Calculate the loan’s annual percentage rate. Round your answer to two decimal places. %Bank Muzn provides musharakah mutanaqisah financing to Moonway corporation for house developing project amounting to OR 250,000. This amount represents 25% of the total cost of the project. The term of financing is for 10 years and the partners is required to pay back the bank in 10 equal installments yearly. Calculate Muzn's share of capital at the end of year 10.