Information about cost of borrowing

Assignment Help Auditing
Reference no: EM1355012

Pyramid Products Company has a revolving credit agreement with its bank. The company can borrow up to $1 million under the agreement at an annual interest rate of 9 percent. Pyramid is required to maintain a 10 percent compensating balance on any funds borrowed under the agreement and to pay a 0.5 percent commitment fee on the unused portion of the credit line. Assume that Pyramid has no funds in the account at the bank that can be used to meet the compensating balance requirement. Determine the annual financing cost of borrowing each of the following amounts under the credit agreement:

a. $250,000
b. $500,000
c. $1,000,000

Reference no: EM1355012

Questions Cloud

The funds ability to profit : Apex Inc., is a biotechnology company that is about to announce the results of its clinical trials of a potential new cancer drug. If the trials were successful, apnex stock will be worth $70 each share.
Creating organizational alignment : Creating organizational alignment - Explain what role do departments, such as marketing, human resources, and operations management,
Critical and scientific thinking in psychology : What guidelines should be followed to ensure critical and scientific thinking in psychology?
Impact the organizational strengths and weaknesses : Does the external environment impact the organizational strengths and weaknesses?
Information about cost of borrowing : Pyramid Products Company has a revolving credit agreement with its bank. The company can borrow up to $1 million under the agreement at an annual interest rate of 9 percent.
Write program to display company payroll report in list box : Write a program that display a company payroll report in a list box. the program should read each employees name, hourly rate and hours worked from a file and produce a report.
What is the angle of incidence : You are listening a soft music with a sound level of 50 dB. A subway train passes by whose sound level is 90 dB. What is total intensity level of the combined sound in dB.
Different types of organizations : Organizational Impact - Select at least three different types of organizations.
Illustrate what happen to public saving - national saving : illustrate what happen to public saving, national saving and private saving.

Reviews

Write a Review

 

Auditing Questions & Answers

  Controls over payroll in auditing

Describe in detail the controls over payroll in auditing.

  Limitations of internal control system

You are an accountant at a local CPA firm that is auditing the accounting records of XYZ Company. You have been asked to educate the accounting department about the limitations of the internal control system in preparation for an upcoming audit.

  Procedures for initial planning of financial statement audit

Which of the following procedures would an auditor most likely include in the initial planning of a financial statement audit?

  Different types of audit evidence

Seven different types of evidence were discussed. The following questions concern the reliability (competence) of that evidence: Explain why confirmations are normally more reliable evidence than inquiries of the client.

  Auditor professional judgment

Since an auditor is unable to examine every transaction, it is necessary to determine how many transactions to examine. After completing all the steps of the internal control audit process, the auditor determines a sample of transactions to audit.

  Auditing and assurance

Show the audit inherent risk and rate the risk as low, medium or high.

  Determining fraud detection

Identify and describe Reed's responsibilities to detect Smith's errors and fraud. Do not identify specific audit procedures.

  Determining audit practices

Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS. What factors cause certain taxpayers to be audited more frequently?

  Internal complaints

Discuss how can an organization best use its internal complaint process to forego the need for external resolution? When might a professional moderation be useful? Provide an example.

  Control system conditions

What are several conditions that may lead to fraud? To what type of fraud may these conditions lead? Explain some risks to the revenue and collection cycle that are the result of improper revenue collection.

  Primary reasons for audit failures-scandals

What are the primary reasons for audit failures and the potential scandals that occur when problems are brought to light?

  Differences in assurance-attestation-auditing services

What is the difference between assurance services, attestation services, and auditing services? What are the economic issues that drive the increased demand for assurance services?

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