Compute effective interest rate

Assignment Help Corporate Finance
Reference no: EM1359173

32. Slipshod Machine Tool Co. owes $40,000 to one of its suppliers. The supplier has offered a trade discount of 2/10 net 30. Slipshod can borrow the funds from either of two banks: First City Bank will loan the funds for 20 days at a cost of $400; Upstart Bank offers a discounted loan for 20 days at a cost of $320.

a) What is the cost of failing to take the discount?
b) What is the effective interest rate on each of the loans?
c) Which alternative should Slipshod follow?

 

Reference no: EM1359173

Questions Cloud

Preparing for life after graduation : Explain the resources and how you can use them to better your educational experience and help you find a job after you graduate.
How large video memory is required to store image : How large a video memory is required to store a 640 X 480 image during display? A 1600 X 900 image? A 1440 X 1080 image?
Effective-interest method of amortization : Assuming that interest is computed annually, at what carrying value should the total liability for these bonds be reported two years later on December 31, 2012, if the effective-interest method of amortization is used?
Analyzing feedback within supply chain at ebbd : the difference between what was predicted and the actual result. Forecast errors can be used as feedback to help improve future predictions.
Compute effective interest rate : Slipshod Machine Tool Corporation owes $40,000 to one of its suppliers. The supplier has offered a trade discount of 2/10 net 30. Slipshod can borrow the funds from either of two banks:
Illustrate what is the effect of westland expansionary : Illustrate what is the effect of Westland's expansionary monetary policy on Eastland's nominal exchange rate in the short run and in the long run.
What are the currents that the block can carry : what are the currents that the block can carry.
Write complete payroll program for a company : Now, write a complete PAYROLL program for a company in which each employee falls into one of the 3 categories - Administrative, FactoryEmployee or Salesperson.
Difficulties in interviewing child victims of sexual abuse : Child sexual abuse is, unfortunately, a pervasive crime, and one that can often be difficult to prosecute. Discuss some difficulties in interviewing child victims of sexual abuse

Reviews

Write a Review

Corporate Finance Questions & Answers

  Find the specific option available to the company

Preparation of Performa Balance Sheet from the given ratios and other information - Find the specific option available to the company for meeting its resource needs if the bank provided a loan of $200,000 as sought by the company?

  Formulate a linear goal programming model

Ferris, an investment management company located in New York, has recently been keptas the endowment fund manager for a small Midwestern college. Formulate a linear goal programming model.

  Explain the operating profit margin

Select any public company, & present findings from your financial analysis in a report. The report must include the following;

  Facilitating the exporting process

Some argue that government-sponsored agencies such as the Export-Import Bank of the U.S. essentially subsidizes United State exports;

  Proper value of the securities being offered

Render an opinion to potential investors on the proper value of the securities being offered

  Second national bank total sources of liquidity

Fed accept non-bank financial institutions to buy money from the discount window during mortgage crisis and even allowed non-banks to swap mortgages for Treasury securities and also determine the 2nd National Bank's total sources of liquidity

  Evaluation using roi in a real world organization

I am trying to find online data, journal articles or textbook references regarding a business approach to evaluation using ROI in a real-world organization.

  Compute current stock price

Star Wars Group just paid a dividend of $1.50 per share on its stock. The dividends are expected to grow at a constant rate of 10 percent per year, indefinitely.

  Calculate the expected return on each share

The given table provides share return forecasts & associated probabilities for Advanced Limited & Bright Limited.

  Universal life policy

The given table provides data about a universal life policy. Fill in the Table Year 1 Year 2 Year 3 Cash value at starting of year $10,000

  Compute the per capital cost per police officer

The average cost of hiring each police officer every year if $30,000 for a small twon. The current population of the town is one thousand. Compute the per capital cost per police officer.

  Do you advise him to undertake the project

He also assumes that he will keep refinancing this debt indefinitely with new debt issues. Do you advise him to undertake the project?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd