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Motoguzzie (A). Motoguzzie exports large-engine motorcycles (greater than 700cc) to Australia and invoices its customers in U.S. dollars. Sydney Wholesale Imports has purchased $2,920,000 of merchandise from Motoguzzie, with payment due in six months. The payment will be made with a bankers' acceptance issued by Charter Bank of Sydney at a fee of 1.72% per annum. Motoguzzie has a weighted average cost of capital of 10.7%. If Motoguzzie holds this acceptance to maturity, what is its annualized percentage all-in cost? (NOTE: Assume a 360-day year.) The bankers' acceptance fee is $ 25112. (Round to the nearest cent.) Calculate the amount received by Motoguzzie below: (Round to the nearest cent.) Bankers' Acceptance Face amount f bankers' acceptance Less acceptance fee for 6-month maturity Amount received The opportunity cost of capital is $. (Round to the nearest cent.) $ $ $ 2,920,000.00 (25,112.00) 2,894,888.00

Motoguzzie (A). Motoguzzie exports large-engine motorcycles (greater than 700cc) to Australia and invoices its customers in U.S. dollars. Sydney Wholesale Imports has purchased $2,920,000 of merchandise from Motoguzzie, with payment due in six months. The payment will be made with a bankers' acceptance issued by Charter Bank of Sydney at a fee of 1.72% per annum. Motoguzzie has a weighted average cost of capital of 10.7%. If Motoguzzie holds this acceptance to maturity, what is its annualized percentage all-in cost? (NOTE: Assume a 360-day year.) The bankers' acceptance fee is $ 25112. (Round to the nearest cent.) Calculate the amount received by Motoguzzie below: (Round to the nearest cent.) Bankers' Acceptance Face amount f bankers' acceptance Less acceptance fee for 6-month maturity Amount received The opportunity cost of capital is $. (Round to the nearest cent.) $ $ $ 2,920,000.00 (25,112.00) 2,894,888.00

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Motoguzzie (A). Motoguzzie exports large-engine motorcycles (greater than 700cc) to Australia and invoices its customers in U.S. dollars. Sydney Wholesale Imports has purchased $2,920,000 of merchandise from Motoguzzie, with payment due in six months. The payment will be made with a bankers' acceptance issued by Charter Bank of Sydney at a fee of 1.72% per annum. Motoguzzie has a weighted average cost of capital of 10.7%. If Motoguzzie holds this acceptance to maturity, what is its annualized percentage all-in cost? (NOTE: Assume a 360-day year.) The bankers' acceptance fee is $ 25112. (Round to the nearest cent.) Calculate the amount received by Motoguzzie below: (Round to the nearest cent.) Bankers' Acceptance Face amount of bankers' acceptance 2$ 2,920,000.00 Less acceptance fee for 6-month maturity (25,112.00) Amount received $ 2,894,888.00 The opportunity cost of capital is $. (Round to the nearest cent.)
Transcribed Image Text:Motoguzzie (A). Motoguzzie exports large-engine motorcycles (greater than 700cc) to Australia and invoices its customers in U.S. dollars. Sydney Wholesale Imports has purchased $2,920,000 of merchandise from Motoguzzie, with payment due in six months. The payment will be made with a bankers' acceptance issued by Charter Bank of Sydney at a fee of 1.72% per annum. Motoguzzie has a weighted average cost of capital of 10.7%. If Motoguzzie holds this acceptance to maturity, what is its annualized percentage all-in cost? (NOTE: Assume a 360-day year.) The bankers' acceptance fee is $ 25112. (Round to the nearest cent.) Calculate the amount received by Motoguzzie below: (Round to the nearest cent.) Bankers' Acceptance Face amount of bankers' acceptance 2$ 2,920,000.00 Less acceptance fee for 6-month maturity (25,112.00) Amount received $ 2,894,888.00 The opportunity cost of capital is $. (Round to the nearest cent.)
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