NEW MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
14th Edition
ISBN: 9780133543759
Author: Lawrence J. Gitman, Chad J. Zutter
Publisher: PEARSON
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Textbook Question
Chapter 16, Problem 16.5WUE
Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000. What is the dollar amount of interest paid on the commercial paper? What is the effective 120-day rate on the paper?
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Jeffrey Telecom sold $300,000 worth of 120-day commercial paper for $298,000? Show Solutions and Explanation.
A. What is the dollar amount of interest paid on the commercial paper? (Format: 1,111)
B. What is the effective 120-day rate on the paper? (Format: 1.11%)
Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000.
1.What is the dollar amount of interest paid on the commercial paper? Format: 1,111
2.What is the effective 120-day rate on the paper? Format: 1.11%
If $1 million face amount of commercial paper(270 day paper) is sold for $982,500, what is the simple rate of interest paid? What is the compound annual rate?
Chapter 16 Solutions
NEW MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
Ch. 16.1 - Prob. 1FOECh. 16.1 - What are the two major sources of spontaneous...Ch. 16.1 - Prob. 16.2RQCh. 16.1 - Prob. 16.3RQCh. 16.2 - Prob. 1FOPCh. 16.2 - How is the prime rate of interest relevant to the...Ch. 16.2 - How does the effective annual rate differ between...Ch. 16.2 - What are the basic terms and characteristics of a...Ch. 16.2 - What is a line of credit? Describe each of the...Ch. 16.2 - What is a revolving credit agreement? How does...
Ch. 16.2 - Prob. 16.9RQCh. 16.2 - Prob. 16.10RQCh. 16.3 - Are secured short-term loans viewed as more risky...Ch. 16.3 - In general, what interest rates and fees are...Ch. 16.3 - Describe and compare the basic features of the...Ch. 16.3 - For the following methods of using inventory as...Ch. 16 - Prob. 1ORCh. 16 - Prob. 16.1STPCh. 16 - Prob. 16.1WUECh. 16 - Prob. 16.2WUECh. 16 - Prob. 16.3WUECh. 16 - Prob. 16.4WUECh. 16 - Horizon Telecom sold 300,000 worth of 120-day...Ch. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Learning Goal 1 P16-4 Early payment discount...Ch. 16 - Prob. 16.5PCh. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Prob. 16.9PCh. 16 - Unsecured sources of short-term loans John Savage...Ch. 16 - Learning Goal 3 P16-11 Effective annual rate A...Ch. 16 - Prob. 16.12PCh. 16 - Compensating balance versus discount loan Weathers...Ch. 16 - Prob. 16.14PCh. 16 - Cost of commercial paper Commercial paper is...Ch. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Prob. 16.19PCh. 16 - Inventory financing Raymond Manufacturing faces a...Ch. 16 - ETHICS PROBLEM Rancco Inc. reported total sales of...
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- 1. Dalagang Pilipina 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. How large should the commercial paper issue be to achieve the needed amount? (nearest peso amount)arrow_forwardMcEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 70 days after their purchases.a. What is the days sales outstanding?b. What is the average amount of receivables?c. What is the percentage cost of trade credit to customers who take the discount?d. What would happen to McEwan’s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?arrow_forwardTokyo Corporation purchases P1,500 in raw material each month to support sales of P2,500 that occur in the following month. In addition, Tokyo Corporation pays wages, rent, and taxes that total P700 each month. What is Tokyo's total monthly cash disbursements? a. P300 b. P4,700 c. P700 d. P2,200 e. P1,000arrow_forward
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