calculate the percent interest rate and effective cost, Cost Accounting

1. The following three one-year "discount" loans are available toyou:

Loan A: $120,000 at a 7 percent discount rate

Loan B: $110,000 at a 6 percent discount rate

Loan C: $130,000 at a 6.5 percent discount rate

a. Determine the dollar amount of interest you would pay oneach loan and indicate the amount of net proceeds each loanwould provide. Which loan would provide you with the mostupfront money when the loan takes place?

b. Calculate the percent interest rate or effective cost of eachloan. Which one has the lowest cost?

4. ATM Banc has the following liabilities and equity categories:

Deposits $9 million

Other liabilities $4 million

Owners' capital ?

Total liabilities and capital ?

a. What would be the bank's total liabilities and capital ifowners' capital were half the size of other liabilities?

b. If total liabilities and capital were $15.5 million, what wouldbe the amount of the loans?

c. If total liabilities and capital were $14 million, and $1 millionof deposits were withdrawn from the bank, what would bethe amount of the owners' capital?

7. Rearrange the following accounts to construct a bank balancesheet for Second National Bank. What are the total amounts thatmake the bank's balance sheet balance?

Demand deposits: $20 million                                 Government securities owned: $7 million

Cash assets: $5 million                                             Bank fixed assets: $14 million

Loans secured by real estate:                                  Time and savings deposits:

$30 million                                                                 $40 million

Commercial and industrial loans:                             Federal funds purchased:

$18 million                                                                 $6 million

Owners' capital: $6 million                                      Other long-term liabilities: $2 million

Posted Date: 2/19/2013 1:05:53 AM | Location : United States

Related Discussions:- calculate the percent interest rate and effective cost, Assignment Help, Ask Question on calculate the percent interest rate and effective cost, Get Answer, Expert's Help, calculate the percent interest rate and effective cost Discussions

Write discussion on calculate the percent interest rate and effective cost
Your posts are moderated
Related Questions
Total costs include both variable costs and fixed costs. Variable costs are costs which can beeasily identified or related to a cost per unit or activity level of some kind for exa

Example of High - Low Method of Cost Estimation Based on the performance, such you have been provided along with the given information regarding ABC Ltd for the year ended on

High-Low method of cost estimation and Number of Photocopies as the cost driver, what would be the resulting cost equation for Maintenance Costs?

Alternative to Total Overhead Variances There is an easier approach to overhead variances.  In this approach, the overheads are NOT sub-divided into their fixed and variable e

Mr. Marley is a wholesaler who buys and sells a wide range of products, one of which is the Laker. Mr. Marley sells 24,000 units of the Laker each year at a unit price $20. Sales o

Flexible budgets provide different information than static budgets. Discuss some of these differences. Is a flexible budget always better? Are there times when you’d recom

What type of activity could a company engage in to improve their cash flows in their Cash Flows Statement? Is this ethical? Could borrowing money make the cash from operations be

Assumptions of Break-Even Analysis 1. The break-even chart is fundamentally a static analysis; commonly changes can merely be displayed by drawing a new chart or a series of c

The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has a