Epsilon Corporation has P1,425,000 cash balance as of Jan. 1, 2022. Duringthe month, it forecasts collections of P2,400,000, and disbursementsincluding payments for major equipment overhauling of P4,300,000. Abond covenant requires Epsilon to maintain a minimum alance ofP1,250,000. VWhich among the 3-month debt options should Epsilonchoose? Final answer should be thethe chosen debt.DebtFa AmountInterestRemarksA2,400,000 11.50% Interest is deducted in advance2,000,000 11.00% Finance charge of P70,0001,750,000 12.00% Finance charge of P100,0001,500,000B.D.9.00% Finance charge of P50,000

Cash budget : The cash budget is the estimation of cash inflow and outflow during the period. It…

Epsilon Corporation has P1,425,000 cash balance as of Jan. 1, 2022. During the month, it forecasts collections of P2,400,000, and disbursements including payments for major equipment overhauling of P4,300,000. A bond covenant requires Epsilon to maintain a minimum cach balance of P1,250,000. Which among the 3-month debt options should Epsilon choose? Final answer should be the the chosen debt. NOT Pounded annual effective cost of

Epsilon Corporation has P1,425,000 cash balance as of Jan. 1, 2022. During the month, it forecasts collections of P2,400,000, and disbursements including payments for major equipment overhauling of P4,300,000. A bond covenant requires Epsilon to maintain a minimum cach balance of P1,250,000. Which among the 3-month debt options should Epsilon choose? Final answer should be the the chosen debt. NOT Pounded annual effective cost of

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 5P: Short-Term Debt Expected to Be Refinanced On December 31, 2019, Atwood Table Company has 8 million...

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Question

Epsilon Corporation has P1,425,000 cash balance as of Jan. 1, 2022. During
the month, it forecasts collections of P2,400,000, and disbursements
including payments for major equipment overhauling of P4,300,000. A
bond covenant requires Epsilon to maintain a minimum alance of
P1,250,000. VWhich among the 3-month debt options should Epsilon
choose? Final answer should be the
the chosen debt.
Debt
Fa Amount
Interest
Remarks
A
2,400,000 11.50% Interest is deducted in advance
2,000,000 11.00% Finance charge of P70,000
1,750,000 12.00% Finance charge of P100,000
1,500,000
B.
D.
9.00% Finance charge of P50,000

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