Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365- day year.)
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- Haumea has been offered credit terms of discount of four percent if paid within thirty days, if not it is due in ninety days. Assume 365 a year operations. Compute for the nominal annual percentage cost of its non- free trade credit, if Haumea pays 120 days after the purchase? * O 17.74% 18.63% 16.90% 16.05% 19.56%a. Abc Investment Ltd., plans to borrow Ghc100,000 for a 90-day period from Lloyds Finance Company. Abc investment would repay the principal amount plus Ghc5,000 interest at maturity. Determine and calculate the Annual Percentage Rate of the credit to Abc Company Ltd. b. Belinda Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The company’s current assets consist of inventory and trade receivables. Current liabilities consist of accounts payables and an overdraft facility with an average interest rate of 10% per annum. The company gives 60 days credit to its customers and is allowed an average of 30 days credit by trade suppliers. The company has an operating cycle of 90 days. Other relevant information: Current ratio of Ait Ltd 1.5:1 Cost of long-term finance to Ait Ltd is 12% per annum Required: Calculate the, (i) Size of the overdraft of Ait Ltd (ii) Net working capital of the company (iii) Total cost of financing its current assets c.…Haumea has been offered credit terms of discount of four percent if paid within thirty days, if not it is due in ninety days. Assume 365 a year operations. Compute for the nominal annual percentage cost of its non-free trade credit, if Haumea pays 120 days after the purchase?
- Ammer Products has an average accounts payable balance of P850,000 and its annual net credit purchases is P8,750,000. Assume there are 365 days per year. What is Ammer’s payables deferral period?Assume that a firm issues $500,000,000 of U.S. commercial papers (and therefore uses a 360-day year for CP calculations) with a 30-day maturity at a discount of 0.5%. The annualized dealer fee is 0.175% and the cost of a backup line of credit is 0.25%. a. What is the amount of usable funds? b. What is the amount of dealer fee? c. What is the amount of backup line of credit? d. What is the annualized cost of the paper?Suppose that Woolworth needs to borrow AUD27 million in six months for a six-month period. To lockin the rate on this loan, Woolworth buys a "6 x 6 FRA on LIBOR at 16% p.a. from ÁNZ for a notional principal of AUD27 million. 6 x 6" means that ANZ has entered into a six-month forward contract on six-month LIBOR.Assume that in six months LIBOR6 is 21% p.a. How much will Woolworth receive from AÑZ from this FRA contract? Assume that each month is 30 days. Select one a. AUD610860 b. AUD675000 c AUD625000 d. AUD1115702 e. AUD1954751
- This scenario relates to three requirements. Nesud Co has credit sales of $45 million per year and on average settles accounts with trade payables after 60 days. One of its suppliers has offered the company an early settlement discount of 0.5% for payment within 30 days. Administration costs will be increased by $500 per year if the early settlement discount is taken. Nesud Co buys components worth $1.5 million per year from this supplier. From a different supplier, Nesud Co purchases $2.4 million per year of Component K at a price of $5 per component. Consumption of Component K can be assumed to be at a constant rate throughout the year. The company orders components at the start of each month in order to meet demand and the cost of placing each order is $248.44. The holding cost for Component K is $1.06 per unit per year. The finance director of Nesud Co is concerned that approximately 1% of credit sales turn into irrecoverable debts. In addition, she has been advised that customers…If a firm buys on term of 3/15, net 45, what is the APR of it's non-free trade credit? What is the effective annual rate?Carry Trade, Inc., borrows yen when the yen is trading at ¥120/US$. If the nominal annual interest rate of the loan is 5% and at the end of the year the yen trades at ¥130/USS, what is the effective annual interest rate of the loan? The effective annual interest rate is %. (Round to two decimal places. Enter a negative number for a depreciation of the yen.)
- NEKO Inc. is given terms of 2/10, net 45 by its suppliers. If NEKO Inc. forgoes the cash discount offered and pays the suppliers 5 days after the due date, what is the annual interest rate cost (Use 360-day year)?Credit terms of 4/30, net 90 days have been given to the Orchids Incorporated. What is the nominal annual percentate cost of the non-free trade credit if it pays within 120 days of purchase? (assume a calendar year of 365 days)Company is contemplating factoring its accounts receivable. The factor will acquire P250,000 of the company’s accounts receivable every 2 months. An advance of 75 percent is given by the factor on receivables at an annual charge of 18 percent. There is a 2 percent factor fee associated with receivables purchased. What is the cost of the factoring arrangement? choose the letter of the correct answera. P30,000.00b. P33,750.00c. P63,750.00d. P103,000.00e. P125,000.00
