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c. If total liabilities and capital were $14 million, and $1 millionof deposits were withdrawn from the bank, what would bethe amount of the owners' capital?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

Describe the manner in which a materials usage variance is divided into mix and yield component variances.

Each unit of a product requires four components. The average number of components is 4.25 due to component failure. Purchasing higher quality components can reduce the average numb

UTILITY OF BREAK EVEN POINT IN MANAGERIAL DECISION MAKING 1. It assists in determination of sales mix 2. It assists in exploring new markets 3. It assists in deciding abo

In most situations this will be essential to grant credit to customers. It may be essential either due to competition or because of the custom of trade. Though, when we grant credi

The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm’s output is $25. The cost of other va


The Gladys Corporation buys office equipment costing $426,000 on May 12, 2013. In 2015, new and improved models of the equipment make it obsolete, and Gladys sells the old equipme


limitations in cost plus pricing