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The company needs to finance $8,000,000 for a new factory in Mexico. The funds will be obtained through a commercial loan and by issuing corporate bonds. Here is some of the information regarding the APRs offered by two well-known commercial banks.
Bank APR Number of Times CompoundedNational First Prime Rate + 6.75% SemiannuallyRegions Best 13.17 Monthly
1. Assuming that AirJet Parts, Inc. is considering loans from National First and Regions Best, what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board's website (https://research.stlouisfed.org/fred2/). Select "Interest Rates" and then "Prime Bank Loan Rate". Use the latest MPRIME. Show your calculations.
Based on your calculations above, which of the two banks would you recommend and why? Explain your rationale.
AirJet Best Parts, Inc. has decided to take a $6,950,000 loan being offered by Regions Best at 8.6% APR for 5 years. What is the monthly payment amount on this loan? Do you agree with this decision? Explain your rationale.
Make a executive summary in which you recognize and discuss three to five evolving trends which influence innovation.
If you want to inest in a stock that pays $3.50 annual cash dividens for the next six yrs. At the end of the six years, you will sell the stock for $22.50. If you want to earn 12.5% on this investment, what is a fair price for this stock if you bu..
calculate the one year bond equivalent yield for the Swiss government security that would support the interest rate parity condition.
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Shaw Company sells goods that cost $282,000 to Ricard Company for $411,000 on January 2, 2014. The sales price includes an installation fee, which is valued at $39,000. The fair value of the goods is $372,000. The installation is expected to take ..
An Exchange dealer has $1,000,000.00 to invest for 3 months. Given the following information.
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If taxes are 35%, the appropriate discount rate is 9% and you use the current exchange rate for pesos:
Tucker Drilling Corporation wants to borrow $200,000. Northern National Bank will lend the money at one-half percentage point over the prime rate of 8 1/2% (9 percent total) & requires a compensating balance of 20%.
Suppose you need $28,974 at the end of ten years, and your only investment outlet is an 8% long term certificate of deposit.
The U.S. Treasury bill is currently selling at a discount basis of 4.25%. The par value of the bill is $100,000, and will mature in ninety days. What is the price of this Treasury bill?
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