User Account

All Pages

Calculate the loan annual financing cost

Assignment Help Finance Basics
Reference no: EM131133284

1. Van Buren Resources, Inc., is considering borrowing $100,000 for 182 days from its bank. Van Buren will pay $6,000 of interest at maturity, and it will repay the $100,000 of principal at maturity.

a. Calculate the loan's annual financing cost.

b. Calculate the loan's annual percentage rate.

c. What is the reason for the difference in your answers to parts a and b?

2. Determine the annual financing cost of forgoing the cash discount under each of the following credit terms:

a. 2/10, net 60

b. 1½/10, net 60 c. 2/30, net 60

d. 5/30, net four months (assume 122 days) e. 1/10, net 30

Reference no: EM131133284

Questions Cloud

What were his main ideas about human nature : What ideas/events helped shape his beliefs? What were his main ideas about human nature? What did he believe the role of the citizen in society was? And when did he believe society best functioned?
Answer the following questions for e business : answer the following questions for e-Business- What is micromarketing and how can an online ecommerce company micro-segment their consumers using online data?
Consumer confidence disposable income and recessions : Plot the level of the index of consumer sentiment against the growth rate of disposable income per person. Is the relationship positive?
Makes the pv of the future cash flows : 1. The IRR for a project is the discount rate that: a. sets the PV of the projectAc€?cs
Calculate the loan annual financing cost : 1. Van Buren Resources, Inc., is considering borrowing $100,000 for 182 days from its bank. Van Buren will pay $6,000 of interest at maturity, and it will repay the $100,000 of principal at maturity.
Discuss how the belief in the new economy : Discuss how the belief in the New Economy, combined with the increase in stock prices, affected consumption spending.
Calculate the annual eva in a typical year : NPV and EVA A project costs $2.5 million up front and will generate cash flows in perpetuity of $240,000. The firm's cost of capital is 9%. a. Calculate the project's NPV.
How did versailles symbolize authority of the french king : In what ways did the new science of Copernicus, Brahe, Kepler, and Galileo challenge not only the Aristotelian cosmos--foundation of all medieval science--but also the claims of the church?
How these changes in expectations affect output today : A new president, who promised during the campaign that she would cut taxes, has just been elected. People trust that she will keep her promise, but expect that the tax cuts will be implemented only in the future.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the operating cycle at telecraft

Telecraft Enterprises carries 45 days of inventory in its stores. Last year Telecraft reported net sales of $1,302,300 and had receivables of $322,000 at the end of the year. What is the operating cycle at Telecraft ?

  Is there anything that you dont agree with

What did you learn from reading a summary of "A Random Walk Down Wall Street" and how will you apply it in your investing life? Is there anything that you don't agree with?

  Find an article that discusses the results of a survey poll

find an article that discusses the results of a survey poll. discuss and critique their methodology results and

  What is the cost of common equity for whitewall

If Whitewall is expected to increase its annual dividend by 2 percent per year into the foreseeable future and the current price of Whitewall's common shares is $11.66, what is the cost of common equity for Whitewall?

  Olgas cost recovery deduction for 2012 except for cost

olga is the proprietor of a small business. in 2012 the business income before consideration of any cost recovery or

  Find which investment is more risky

Security A has an expected rate of return of 6 percent, a standard deviation of returns of 30 percent, a correlation coefficient with the market of -0.25, and a beta coefficient of -0.5.

  Explain the benefits and risks of debt financing

Touring Enterprices, Inc., has a capital structure of $18 million in long-term debt and $7 million in common equity. There is no preferred stock outstanding. The interest rate paid on the long-term debt is 10%. The firm is in the 35% tax bracket.

  Stagnant iron and steel currently pays a 1225 annual cash

stagnant iron and steel currently pays a 12.25 annual cash dividend d0. they plan to maintain the dividend at this

  If sales increase by 10 percent to 11000 units by what

firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed

  Accounting for earnings per share has certain weaknesses

accounting for earnings per share has certain weaknesses that our analysis must consider for interpreting eps data.

  What is the net cost of the call premium

Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?

  How the adult learning principles might be applied

If you have not participated in a training event, then describe how the adult learning principles might be applied to a training for Advanced Microsoft Office (hint: what prior knowledge would students need, etc.?).

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd