A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was
Q: Please solve this question general accounting
A: Step 1: Define Annual Interest ExpenseAnnual Interest Expense refers to the cost a borrower pays…
Q: General Accounting
A: Concept of Debt-Equity RatioThe debt-equity ratio is a financial metric that measures a company's…
Q: Lavu's Cakes produces muffins, which sell for $6.20 each. During the current month, Lavu produced…
A: Explanation of Absorption Costing:Absorption costing is a method of accounting that includes all…
Q: hi expert please help me
A: Step 1: Definition of Gross Profit PercentageThe Gross Profit Percentage (Gross Profit Margin) is a…
Q: Eckhart Corp. reports that at an activity level of 5,800 machine-hours in a month, its total…
A: Explanation of Variable Costs: Variable costs are expenses that change in direct proportion to the…
Q: i need correct option
A: Step 1: Definition of LiabilitiesLiabilities represent the financial obligations a company owes to…
Q: How much is your total cost of these financial accounting question?
A: Step 1: Definition of Total Cost CalculationThe total cost of a dinner bill includes the original…
Q: How much is cash received from customer for the year
A: Concept of Sales RevenueSales revenue refers to the total income a company generates from selling…
Q: What is the materials quantity variance ?
A: Explanation of Standard Costs: Standard costs are predetermined costs that a company expects to…
Q: Martin Corporation incurs a cost of $38.65 per unit, of which $22.35 is variable, to make a product…
A: Explanation of Special Order:A special order is a one-time purchase request from a customer, usually…
Q: Please give me answer general accounting question
A: Step 1: Definition of Adjusting EntryAn adjusting entry is a journal entry made at the end of an…
Q: Give me Answer
A: To arrive at a solution, follow the steps below: Step 1: Identify the Given InformationThe initial…
Q: hello tutor provide solution
A: Step 1: Definition of Realized GainA realized gain occurs when an asset increases in value and the…
Q: Given correct answer general accounting
A: Step 1: Define Taxes OwedTaxes owed by a company are calculated using the average tax rate when…
Q: Accounting question
A: Step 1:Direct labor rate variance shows the difference between actual rate and standard labor rate.…
Q: Financial accounting
A: Step 1: Define Gross ProfitGross profit is the amount a company earns after deducting the direct…
Q: need help this questions
A: Step 1: Definition of Materials Purchase Price VarianceThe Materials Purchase Price Variance (MPPV)…
Q: Can you help me with accounting questions
A: Step 1: Definition of High-Low Method The high-low method is a technique used to estimate the fixed…
Q: Don't use ai given answer accounting questions
A: Calculate Earnings Before Interest and Taxes (EBIT):EBIT = Annual Revenue - Depreciation Expense -…
Q: Compute the total amount of product cost
A: Explanation of Product Costs: Product costs are expenses that are directly associated with…
Q: What is the company's ending total equity?
A: Step 1: Definition of Total EquityTotal equity represents the ownership interest remaining in a…
Q: Subject general accounting
A: Explanation of Total Asset Turnover Ratio:The total asset turnover ratio measures how efficiently a…
Q: Quick answer of this accounting questions
A: Step 1: Definition of Gain or Loss on DisposalA gain or loss on disposal occurs when an asset is…
Q: Opal works for Clarendon Ltd. in Jamaica. She received her notice of assessment on April 10, and was…
A: Opal, an employee of Clarendon Ltd. in Jamaica, received her notice of assessment on April 10. She…
Q: hello tutor please help me
A: Step 1: Definition of Accounts ReceivableAccounts Receivable represents the amount a company is…
Q: Answer this Question
A: Concept of Variable Costing Net Operating IncomeVariable costing net operating income is the profit…
Q: Question
A: Number of Shares = 800Price per Share = $52Initial Deposit = $20,400 1. Margin Loan AmountMargin…
Q: I want to correct answer general accounting question
A: Step 1: Definition of Cash from Operations (CFO)Cash from Operations (CFO) represents the cash…
Q: Do fast answer of this accounting questions
A: Step 1: Definition of Net IncomeNet income is the amount of profit a company earns after deducting…
Q: Subject general accounting
A: Explanation of Asset Turnover Ratio:The asset turnover ratio measures a company's efficiency in…
Q: hello tutor provide solution
A: Sales = 12,000,000ROE = 12% or 0.12Total Assets Turnover = 4Common Equity = 40% of Total Assets 1.…
Q: On January 1, 2020, Nexus Technologies purchased a machine for $15,000. The machine was estimated to…
A: Calculation of Annual Depreciation (Straight-Line)Annual Depreciation = (Purchase Price - Residual…
Q: Accurate Answer
A: Concept of Contribution Margin RatioThe Contribution Margin Ratio represents the percentage of sales…
Q: How much is Tristab's amount realized
A: Selling Price = $8,900Commission (Selling Expense) = $320Amount Realized = Selling Price - Selling…
Q: General accounting
A: To conduct a DuPont analysis, we will break down Return on Equity (ROE) into its three components:…
Q: What was the firm's free cash flow for this financial accounting question?
A: Step 1: Define Free Cash Flow (FCF)Free Cash Flow (FCF) represents the cash available to a company…
Q: Please give me true answer this financial accounting question
A: To determine the weights Silverstone should use in computing the Weighted Average Cost of Capital…
Q: General Accounting Question solve Pls
A:
Q: Need help this question solution
A: Face Value of Bonds = $600,000Annual Interest Rate = 5%Time Period = 7 yearsInterest Payment…
Q: Don't use ai given answer accounting questions
A: Bond proceeds = $250,000Interest rate = 7% (not needed for this calculation)Total shares outstanding…
Q: GreenLeaf Supermarket had the following inventory transactions: Beginning Inventory: 300 units @…
A: Step 1: Definition of Weighted Average Cost MethodThe weighted average cost method assigns an…
Q: Quick answer of this accounting questions
A: Step 1: Definition of After-Tax Cash Flow from Operations (OCF)After-tax cash flow from operations…
Q: Not ChatGPT Answer
A: Concept of Ending InventoryEnding inventory refers to the total value of unsold goods remaining at…
Q: Kindly help me with of this question general accounting
A: Step 1: Define Effect of Sale on Initial OutlayWhen a company sells an old asset, the net cash…
Q: a) Prepare the lease schedule for the Kaizen Limitedb) Prepare Kaizen’s journal entries for 2016…
A: Solution: Step 1:a) Prepare the Lease Schedule for Kaizen Limited :- Calculate the Present Value of…
Q: Financial accounting [5 points]
A: Step 1: Product cost under absorption costing.Product Cost ComponentsAbsorption CostingVariable…
Q: choose best answer
A: Step 1: Definition of Operating ActivitiesOperating activities are the primary revenue-generating…
Q: can you please solve this answer
A: Step 1: Definition of Credit SalesCredit sales refer to sales made by a company where the customer…
Q: what is the correct answer
A: Step 1: Calculation of Net PurchasesNet Purchases = Purchases - Purchases Returns and AllowancesNet…
Q: Help
A: Bond Amount (Principal) = $600,000Annual Interest Rate = 5%Term = 7 yearsInterest Payments =…
Solve this financial accounting problem
Step by step
Solved in 2 steps
- A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was_.answer thisNeed answer to this accounting problemIgnoring commission and taxes was
- Cumberland Furniture wishes to establish a prearranged borrowing agreement with its local commercial bank. The bank’s terms for a line of credit are 3.30% over the prime rate, and each year the borrowing must be reduced to zero for a 30-day period. For an equivalentrevolving credit agreement, the rate is 2.80% over prime with a commitment feeof 0.50% on the average unused balance. With both loans, the required compensating balance is equal to 20% of the amount borrowed. The prime rate is currently 8%. Both agreements have $4 million borrowing limits. The firm expects on average to borrow $2 million during the year no matter which loan agreement it decides to use. What is the effective annual rate under the line of credit? b. What is the effective annual rate under the revolving credit agreement? (Hint: Compute the ratio of the dollars that the firm will pay in interest and commitment fees to the dollars that the firm will effectively have used of.) If the firm does expect to borrow…A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time. First National Bank offers 2-year CDs at 9.12% compounded daily, and Citywide Savings offers 2-year CDs at 9.13% compounded quarterly. Compute the annual yield for each institution and determine which is more advantageous for the consumer. (Round your answers to two decimal places.) FNB: r = % CS: r = % who has the better offer.Your company has arranged a revolving credit agreement for up to $71 million at an interest rate of 1.40 percent per quarter. The agreement also requires your company to maintain a compensating balance of 5 percent of the unused portion of the credit line, to be deposited in a noninterest-bearing account. Your company's short-term investment account at the same bank pays an interest rate of .54 per quarter. What is the effective annual interest rate if your company borrows $36 million for one year?
- Jérôme Kerviel Bank charges an APR of 11.80 per cent, compounded monthly, on its business loans. Société Générale charges a six per cent semiannual rate on similar loans. Which option is best from the borrower's point of view? A) Jérôme Kerviel Bank's loan is the best option because its EAR is 12.46 per cent. B) Société Générale's loan is the best option because its EAR is 12.36 per cent. C) Jérôme Kerviel Bank's loan is the best option because its monthly rate is 0.98 per cent, which is smaller than Société Générale's monthly rate at one per cent. D) Société Générale's loan is the best option because its EAR is 6.09 percent. E) Both options are identical from a borrower's perspective.Cloud Venture has a line of credit with a local bank of $75,000. The loan agreement calls for interest of 6 percent with a compensating balance requirement of 3 percent that is based on the total amount borrowed. What is the effective interest rate if the firm needs $58,000 for one year to finance a fixed asset purchase?A bank offers your firm a revolving credit arrangement for up to $86 million at an interest rate of 2.15 percent per quarter. The bank also requires you to maintain a compensating balance of 2 percent against the unused portion of the credit line, to be deposited in a non-interest-bearing account. Assume you have a short-term investment account at the bank that pays 1.50 percent per quarter, and assume that the bank uses compound interest on its revolving credit loans. a. What is your effective annual interest rate (an opportunity cost) on the revolving credit arrangement if your firm does not use it during the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual interest rate % b. What is your effective annual interest rate on the lending arrangement if you borrow $50 million immediately and repay it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2…