Compañía CSB, S.A., requires short-term financing and requests a loan from Banco del Comercio, and proposes to guarantee it with inventories, for an amount of US$ 500,000.00. The bank accepts the proposal, with the following credit conditions: Credit conditions: a) Term 1 year b) He receives the inventories for a value of 90% of the value c) Charges you a 3% disbursement fee d) the interest rate is 20% per year e) The costs related to the mobilization of inventories are borne by Meyer Co., which are 3% of 100% of the value of the inventories. All costs involved must be covered in advance and will be deducted at the time of disbursement. It is requested: 1.- Determine the amount of the credit 2.- Calculate each cost involved in the transaction 3.- Determine the total amount of costs 4.- Determine the net amount you will receive after deducting the total costs 5.- Calculate the real rate of financial cost (TEA)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Compañía CSB, S.A., requires short-term financing and requests a loan from Banco del Comercio, and proposes to guarantee it with inventories, for an amount of US$ 500,000.00. The bank accepts the proposal, with the following credit conditions: Credit conditions: a) Term 1 year b) He receives the inventories for a value of 90% of the value c) Charges you a 3% disbursement fee d) the interest rate is 20% per year e) The costs related to the mobilization of inventories are borne by Meyer Co., which are 3% of 100% of the value of the inventories. All costs involved must be covered in advance and will be deducted at the time of disbursement. It is requested: 1.- Determine the amount of the credit 2.- Calculate each cost involved in the transaction 3.- Determine the total amount of costs 4.- Determine the net amount you will receive after deducting the total costs 5.- Calculate the real rate of financial cost (TEA)

Expert Solution
steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Knowledge Booster
Calculating the Return On A Loan
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education