How does the cost of costly trade credit generally compare with the cost of shorttermbank loans?

Q: How does the cost of commercial paper compare with the cost ofshort-term bank loans? With the cost…

A: Commercial paper: It could be a generally utilized sort of short-term, unsecured debt security…

Q: Why is it essential to know different kinds of loans?

A: A loan helps in determining the money supply and helps new businesses in the lending process. The…

Q: Explain the term Wraparound Loans?

A: Wraparound Loans:Wraparound Loans are also called as wrap. It is a type of mortgage loan.It allows a…

Q: What is a syndicated loan? What are its advantages anddisadvantages?

A: Syndicated loan: It is moreover called as a syndicated bank facility, is loaning given by a bunch of…

Q: Which of the following is not a source of informal short-term finance? *     A. Accrued wages   B…

A: Financing is an act or a process of providing funds to the business in order to operate the business…

Q: What are the effects of lending institutions on the economy?

A: Economy has different functions to maintain like the currency management, trading activities,…

Q: What are the disadvantages of cutting expenses/costs and utilising trade credit insurance, when it…

A: Answer: Trade Credit Insurance is the methods that is applied by the company to protect its debts…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: How does commercial paper differ from a bank loan? Why is the interest rate often less for…

A: Commercial PaperCommercial paper is promissory notes that represent loans issued by the companies.…

Q: What are the major expenses associated with making consumer loans? What is the average size of…

A: A Consumer Loan is a loan that banks provide to consumers in order for them to purchase domestic…

Q: how  various  forms  of  abritrage  can  remove  any  discrepancies  in  pricing  currencies

A: The term arbitrage is defined as the purchase & sale of commodities or any instruments at the…

Q: How does high interest rate and setting ceiling on loans (limited credit) compensate for the…

A: Rate of interest is selected as per the credit-score of the borrower compared to the range set by…

Q: What is credit enhancement, and what effect does it have on debt costs?

A: Credit enhancement represents the strategy that improves the business' credit risk profile. It helps…

Q: Which of the following has the highest relative likelihood of being defaulted in paying the…

A: The interest expense and earnings before interest and income taxes details for each of the company…

Q: What factors must be considered when deciding whether to refinance a loan after interest rates have…

A: Individuals always consider refinancing the loan when interest rate falls because they think they…

Q: Describe the trade-offs of extending credit.

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: What does it mean if a forward currency is selling at a discount relative to the dollar

A: Given : Forward currency is selling at a discount relative to the dollar.   By Forward discount we…

Q: How is the receivables turnover ratio measured? What does this ratio indicate? Is a higher or lower…

A: Receivables turnover ratio is measured by dividing net credit sales of a period by average accounts…

Q: What is a Letter of Credit? Please discuss how a Letter of Credit work. Why is Letter of Credit…

A: What is a Letter of Credit A letter of credit, sometimes known as a "credit letter," is a guarantee…

Q: What is the source of funds within Micro Credit? How does this differ from traditional sources of…

A: The process of getting cash to support company operations, acquisitions, or investments is known as…

Q: What is the indifference point under the net present value? When would there be a discount on a…

A: SOLUTION- NET PRESENT VALUE = PRESENT VALUE OF CASH INFLOW - PRESENT VALUE OF CASH OUTFLOW.

Q: How does the cost of costly trade credit generally compare withthe cost of short-term bank loans?

A: Costly trade credit imply companies that make payments after the discount period as they forego the…

Q: Why might the market value of a loan differ from its outstanding balance?

A: Loan outstanding balance: The outstanding balance or loan balance is the remaining amount that is…

Q: What is consumer credit? What are its advantages and disadvantages?

A: Consumer credit allows the customer to buy the product immediately, without paying for it at the…

Q: What is trade credit?

A: Trade credits are advantageous for buyers because they get sufficient time for making their…

Q: What are the four key factors in a firm's credit policy? How would an easy policy differ from a…

A: Credit Policy of the firm is the Policy firm follows in extending credit to its customers. To…

Q: What are the four key factors in a firm's credit policy? how would a relaxed policy differ from a…

A: Credit Policy relates to guidelines and terms of entity to facilitate credit sales that includes…

Q: A change in money demand or a shift in the money demand curve is caused by a change in * the…

A: the increase demand of money shift the demand curve up.

Q: What are the credit transfer markets?

A: Financial market is called as a place where all securities such as bonds, shares, debentures etc.…

Q: Explain Negative Amortization Loans with example?

A: Amortization is a way to spread regular payment over time. There is a fixed rate which is paid as…

Q: What is trade-off credit and collection policies and its compositions?

A: A external financing is an agreement agreement understanding between partners that facilitates the…

Q: How does a lower credit rating affect borrowers lenders and financial institution? What are the…

A: The credit rating is a measurement of the creditworthiness of the borrower. In the capital market,…

Q: Briefly discuss the following: 1. When does commercial credit occurs? 2. What attributes does…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Calculating the Return On A Loan