Reference no: EM131433101
Directions: In a word document work out the financial problems below. To earn full credit you must show all your calculations.
1. You wish to retire a $10,000,000 bond that can be called in 5 years for 110 percent of par value, or $11,000,000. You also need to make year-end interest payments of $700,000 per year in each of the next five years. If you can invest money at 8 percent, how much money must you set aside today to meet these obligations?
Hint: ($11,000,000 x 0.681) + ($700,000 x 3.993) = ?
2. Your firm is considering the following three alternative bank loans for $1,000,000:
a) 10 percent loan paid at year end with no compensating balance Hint: 10% x $1,000,000 / $1,000,000 = ?
b) 9 percent loan paid at year end with a 20 percent compensating balance Hint: 9% x $1,000,000 / $1,000,000 – (20% x $1,000,000) = ?
c) 6 percent loan that is discounted with a 20 percent compensating balance requirement
Hint: 6% x $1,000,000 / $1,000,000 – {20% x ($1,000,000 – (6% x $1,000,000))] = ?
Assume that you would normally not carry any bank balance that would meet the 20 percent compensating balance requirement. What is the rate of annual interest on each loan?
|
Federal aviation administration-health and human services
: Compare and contrast the management information systems for the Federal Aviation Administration (FAA) and Health and Human Services. Compare each organization use of information systems to help manage internal operations and to make decision. Apprai..
|
|
Thinking more about those powerful practices
: Thinking more about those “powerful practices”, share an example when you may have seen one of those practices definitely NOT being followed. What was the result?
|
|
Types of financial statements-balance sheet-income statement
: Compare and contrast each of the types of financial statements: balance sheet, income statement, and statement of cash flows. Give your opinion of the statement that is most useful to creditors. Provide at least two (2) specific examples of such usef..
|
|
What are three reasons why healthcare facility holds cash
: Explain what an investment banker does. What are the three reasons why a healthcare facility holds cash? Explain what working capital is and why it is needed. List and describe where cash is generated by an organization and where an organization uses..
|
|
Word document work out the financial problems
: You wish to retire a $10,000,000 bond that can be called in 5 years for 110 percent of par value, or $11,000,000. You also need to make year-end interest payments of $700,000 per year in each of the next five years. If you can invest money at 8 perce..
|
|
Investigating corporate mission and vision statements
: The overall purpose of this exercise is to enhance your understanding about the value of creating mission and vision statements and the need to create organizational goals in support of these statements. Use the Internet in this exercise to focus on ..
|
|
Cost-cutting plan
: Sears shares snap 45% higher after $1 billion cost-cutting plan. Sear's attempt at survival, Discuss the changing business environment as it relates to technology, consumer changing preferences and trends... particularly with online shopping versus b..
|
|
Describe some strategic human resource issues bright books
: Bright Books is a book store chain established 10 years ago in northern Michigan. Bright Books has had great success in Michigan and Ohio and is beginning to expand into other states. Most recently, executives have decided to open a store in Orlando,..
|