Problem_Set__3_Solutions

5. If this loan had been made on a 10% add-on basis payable in 12 end-of-month installments, that would be the monthly payments? What is the annual percentage rate? The effective annual rate? ($45,833.33, 17.97%, 19.53%) E • How does the cost of costly trade credit generally compare with the cost of shortterm bank loans? L Focus F9 F10 F11 F12 8 9

Question 5.A bank has borrowing needs at timeT >0. Show that by combining an FRAtrade today with a libor loan at timeT, the bank can today lock in its interest cost forthe periodTtoT+α. Does the borrowing bank need to buy or sell the FRA to do this?What is the fixed rate that the bank locks in?

Which loan strategy would achieve some flexibility; no exposure to credit risk but exposure to repricing risk?   Question 22 options:   A company borrows $1 million for one year at a fixed rate, then renew the credit annually   A company borrows $5 million for five years at a fixed interest rate   A company borrows $5 million for five years at a floating rate, LIBOR + 1%   A company borrows $1 million for one year at LIBOR + 1%, then renew the credit annually

Tyson Inc. wants to hedge an account receivable of ¥595 million to be received in six months using a money market hedge. Given a yen borrowing rate of 6% APR how much will Tyson Inc. need to borrow today in order to match the payment it will receive in six months?   Question 7 options:   ¥577.7 million   ¥595 million   ¥561.3 million   ¥586.2 million

Hello tutor provide correct answer the financial accounting question

2 Quantitative Problem: Bank 1 lends finds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank would like to change the same effective amual rate as Bank 1, what nominal interest rate will they charge their customers? Do not round intermediate calculations. Rand your answers to three decimal WL places. wer maiteme SA A ngu? A 2118 tax f 40 THE # AALIY S * مجلسی W

A firm offers terms of 2/20, net 50. What effective annual interest rate does the firm earn if the credit period is increased to 70 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)d.What effective annual interest rate does the firm earn if the discount period is increased to 25 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

A firm offers terms of 5/14, net 50. What effective annual interest rate does the firm earn when a customer does not take the discount?

[Question text] Syarikat Sinergi is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit for one period or net 30. Based on the following information, determine if the switch is advisable. The interest rate is 2.5% per period. CURRENT POLICY NEW POLICY Price per unit RM175 RM175 Cost per unit RM130 RM130 Sales per period in units 1.000 1,100 Select one: A. Yes, the switch should be made because the NPV is RM8,000. B. No, the switch should not be made because the NPV is -RM4,500. C. Yes, the switch should be made because the NPV is RM4,500. D. No, the switch should not be made because the NPV is -RM8,000.

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What is the apr? Please solve this question general Accounting question

Required: a. A firm currently offers terms of sale of 3/25, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if the terms are changed to 4/25, net 50. a-2. What effect does an increase in the discount rate have on the implicit interest rate charged to customers that pass up the discount? b-1. Calculate the effective annual rate if the terms are changed to 3/35, net 50. b-2. What effect does a decrease in the extra days of credit have on the implicit interest rate charged to customers that pass up the discount? c-1. Calculate the effective annual rate if the terms are changed to 3/25, net 40. c-2. Is there any difference between the implicit interest rate for terms of 3/35, net 50 and 3/25, net 40?

Given the following information, what is expected loss of a $200,000 loan in percent?                                                                                     Probability of default                                     0.30% Loss given default                                         55.00%   A .15%     B .22%     C .33%     D .17%

Q5

Tyson Inc. wants to hedge an account receivable of ¥595 million to be received in six months using a money market hedge. Given a yen borrowing rate of 6% APR and a spot exchange rate of ¥119/$ how much is the yen denominated loan Tyson Inc. will need to borrow today worth when converted into dollars?   Question 6 options:   $4,926,108   $4,716,981   $5,000,000   $4,854,369

5. You want to issue a short-term loan for your company in 3 months. To hedge the risk due to interest rate change, you can long t-bill future short t-bill future long U.S. dollar future short U.S. dollar future