NTA Co. needs to borrow P300,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with a 10% interest rate subject to a 20% of loan compensating balance. Currently, NTA Co. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. How much will NTA Co. need to borrow?
Q: Calculate 1.04 as a ratio.
A: A ratio is a relationship between two variables that shows how much of one variable is contained in ...
Q: This attempt took 15 minutes. Partial Question 1 Consider the following short box spread. All prices...
A: 1. Exercise price (EP) = 80 and call option is there. EP ST payoff at t=0 Payoff at t = 6mts Net ...
Q: A civil engineer starts investing his money when he graduates from college. He is able to afford inv...
A: Discounting is a technique to compute the present value (PV) of future cashflows by using an appropr...
Q: 3. As a financial analyst, you are tasked with finding the price per share of XYZ, a telecom company...
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: Business Maths question f) A calculator is sold under hire purchase term. A deposit of 560/- is req...
A: Solution:- We know, Hire purchase price = Required Deposit (or Down Payment) + Total Amount paid thr...
Q: A store in a more popular location expects to sell 6 eyePhones every 15 minutes. How many eyePhones ...
A: Solution:- We know 1 hour = 60 minutes So, Expected sales in one hour = (Sales in 15 minutes/15) x ...
Q: Which term relates to the beginning of a transaction in time value of money problems? Maturity date ...
A: Time value of money states that the money which is worth today will not be same as in the future.
Q: Use the timeline below to help you! Saving up for a 'college fund' is a difficult task for many par...
A: Future Value is calculated by multiplying the present values with the future value factor of the giv...
Q: Payout Policy. House of Haddock has 5,000 shares outstanding and the stock price is $100. The compa...
A: Value of a company Total value of the company is the current stock price times the number of shares ...
Q: 5.ABC Company, a British company, expects to receive $10,000,000 in 30 days. It wants to hedge its f...
A: Forward contract is a an agreement between the two parties to sell and buy the underlying assets or ...
Q: Choose the letter/s of the correct answer/s. In an investor’s perspective, which among these has th...
A: Compound interest is referred to as interest on the calculation of the deposit or the loan on the ba...
Q: 3. Shares of ABC Corporation stock fell by 14% to close at Php538.75 per share. What was the value o...
A: Solution 3:- We know, stock price before fall - Fall in stock price = Closing Stock price
Q: Stock market analyst. Explain the mutual funds (structure; types; benefits; performance)
A: Mutual Funds: A mutual fund is a collection of money that represents the savings of a group of inves...
Q: Juan Reyes inherited P280,000 on his 30th birthday. This he placed in his own pension fund (bank acc...
A: Compounding is a technique which is used to compute the future value (FV) of the present amount by u...
Q: Answer the following probiems. 1. Rose Anne wants to buy a house and she was offered by the followin...
A: The current price of asset is equal to the sum of down payment and present value of all the the inst...
Q: Question 2:: Mohamed is going to be paying AED 120,000 rent for his new apartment in JVC at the begi...
A:
Q: You want to save the down payment required to purchase a vacation home at the end of five years. If ...
A: Down payment required = $25,000 Interest = 5% Time period = 4 years
Q: Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two type...
A: Net present value is the net value of all the present value of benefits and cost to be incurred or a...
Q: e different than Over the counter markets because on exchanges A. Futures contracts are sta...
A: Step 1 Via-the-Counter (OTC) trader is a trader market divided into areas where traders and retailer...
Q: The additional return over the risk-free rate needed to compensate investors for assuming an average...
A: Basis the general principle that higher risk security do have the higher returns, it is known that s...
Q: The price of a product is expressed as ?, PHP = 10 – 28? where ? is the demand. Which of the followi...
A: Solution:- Total revenue = Price of product x Total demand of the product
Q: ou are considering purchasing shares in First Dawn Inc. Your research reveals the dividend trend for...
A: We will use the dividend discount model here.
Q: The Bainters want to know how much they would pay on their loan each year ds would pay on their loan...
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...
Q: Please solve the problem max 30-60 minutes thank u, im very needed and no reject
A: The term audit comes from the Latin word "audire," which means "to hear." With the help of an impart...
Q: m from XYZ Bank at LIBOR-90 plus a quoted margin of 2%. If the LIBOR-90 effective for the 90-day loa...
A: The interest rate is the percentage of a borrowed money that a lender charges as interest to the bor...
Q: Required: 1. Holding everything else constant, what is the expected NPV of the decision if the prob...
A: Sensitivity Analysis: Sensitivity analysis seeks to find the impact of a change in the independent v...
Q: Bob Jensen Inc. purchased a $580,000 machine to manufacture specialty taps for electrical equipment....
A: Initial investment = $580,000 Time period = 10 years Discount rate = 10% Tax = 25% Depreciation = s...
Q: A £12,000 T-bill is purchased at a 4.05% discount rate for 40 weeks. Find the maturity value of the ...
A: t bills are sold at discount to par is face value equals to its maturity value.
Q: In a regression of the single-index model, the R-square is 66%, residual variance is 0.02, beta esti...
A: The regression analysis is a statistical procedure that allows us to find the linear association bet...
Q: Michael purchased a laptop in installment basis worth 25800 and he needs to pay 3200 per beginning o...
A: Laptop price (P) = 25800 Quarterly payment (Q) = 3200 at the beginning r = 2% per annum = 0.5% per q...
Q: A firm has directly placed an issue of commercial paper that has a maturity of 60 days. The issue so...
A: Commercial Paper: It is an unsecured money market instrument issued by highly rated corporate borr...
Q: a. If Northeast Productions Company is a sole proprietorship owned by Ms. Smith,: (Select the best a...
A: In case of proprietorship, A sole proprietor will be responsible for all the costs and debts of thei...
Q: a gym charges $45 per month and a $75 one time starting fee what equation will show how much it cost...
A: Total cost is the sum of fixed cost, variable cost, and semi-variable costs. Fixed costs remain cons...
Q: Boilermaker Design, Inc. (BD) has an employment contract with its newly hired CEO. The contract requ...
A: N = 3 Rate = 8% Future Value Required = 5,000,000
Q: 7.ABC Company, a British company, expects to receive $10,000,000 in 30 days. It wants to hedge its f...
A: Forward contract is an agreement which is done between two parties to hedge foreign currency risk. I...
Q: The report should contain the following : -Introduction about the banks -Reasons for merger - Advant...
A: Bank is a financial institution which helps in the wealth creation through investments. Also, banks ...
Q: inte
A: Given information : Loan amount $50,000.00 Interest rate 13% Time period 5
Q: Consider a stock worth $100 that can go up or down by 30% per period. The risk free rate is 5%. And ...
A: Binomial and probability method of valuation of call option is method by which fundamental value of ...
Q: The firm is contemplating the following (base case): Vehicle acquisition cost ...
A:
Q: Dan is considering borrowing $500,000 to purchase a new condo. Based on that information, answer the...
A: Amortized Loan: Amortized loan is a type of loan in which the borrower would pay periodic payments ...
Q: Parker borrowed $283,000 at 7.5% compounded quarterly to finance the purchase of a pizza franchise. ...
A: The loan which is discharged by making installment payments consist of two components as interest mo...
Q: Suppose Alcatel-Lucent has an equity cost of capital of 10.5%, market capitalization of $9.36 billio...
A: Free cash flow is the amount of cash available for operating business activities after all the outfl...
Q: Cisco Systems Inc. is a large provider of networking equipment, based in Silicon Valley, California....
A: The extent to which market prices reflect all available, relevant information is referred to as mark...
Q: 6. 3 End of Year 2000 1800 1600 1400 2,194 2,194 2,194 2,194 Revenue 286 286 286 286 Expenses 500 50...
A: Future value/worth Future value of a present value is calculated by multiplying the present value wi...
Q: Use the financial statements below to answer the question. RED Merchandising Statement of Financial ...
A: Interest coverage ratio signifies the amount of earning in terms of interest expense for the period....
Q: The IRR represents O The highest interest rate at which the cost of capital is minimized O The "brea...
A: Internal Rate of Return is the return where present value of cash inflows is equal to present value ...
Q: 3. How large is the gap between Beta(Asset) and Beta(Leverage)? What is the impact of their differe...
A: Beta is a metric used by shareholders to correlate the uncertainty of a securities or portfolio to t...
Q: Calculate the future value of $5,000 in a. Four years at an interest rate of 5% per year. b. Eight y...
A: Future Value: It is the the value of an investment at a future date and is calculated using below f...
Q: Showing your calculations, calculate the price of a $100,000 debenture bond that matures in 15 years...
A: The price of an asset is computed as the present value of the future cash flows associated with the ...
Q: Princetown Corp issues 6% coupon bonds for par value today. These bonds make semi-annual coupon paym...
A: Here,
NTA Co. needs to borrow P300,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with a 10% interest rate subject to a 20% of loan compensating balance. Currently, NTA Co. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. How much will NTA Co. need to borrow?
Step by step
Solved in 2 steps
- National Co. needs to borrow P300,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with a 10% interest rate subject to a 20% of loan compensating balance. Currently, National Co. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. How much will National Co. need to borrow?Tokyo Corporation must pay one of its suppliers P765,000. The bank requires a 15 percent compensating balance on loans to businesses. Due to the absence of funds at the lending bank, Tokyo Corporation must borrow enough to have P765,000.00 available to pay its suppliers after covering the compensating balance. How much must Splash Corporation borrow in order to pay its suppliers P765,000? In your calculations, assume that a year has 360 days. a. P900,000 b. P5,100,000 c. P573,750 d. P765,000 e. P879,750Hendo Corp. can borrow from its bank using a one year (a) simple interest loan with an 11.3% quoted rate and no compensating balance or (b) a discount interest loan with a quoted rate equal to 9.9% that requires a 15% compensating balance. What is the EAR of the lower cost loan? Hendo Corp. normally tries to keep its checking account balance close to $0.
- Yoo, Incorporated, has arranged a line of credit that allows it to borrow up to $51 million at any time. The interest rate is 627 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a noninterest-bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $27 million for 8 months, how much will it pay in interest? Multiple Choice $1.307,50417 $1,457,29019 $1619,200.22 $1.230.592.16) $1,384,41618Yoo, Incorporated, has arranged a line of credit that allows it to borrow up to $42 million at any time. The interest rate is 618 percent per month. Additionally, the company must deposit 4 percent of the amount borrowed in a noninterest bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $18 million for 7 months, how much will it pay in interest? Multiple Choice $925.47741 $793.266.35 $918,132.35 $826,319.11 $1,057,688.46Suppose that you owe $2,000 on a credit card that charges 18% APR and you pay either the minimum 10% or $20, whichever is higher, every month. How long will it take you to eliminate the debt? Assume that the bank uses the previous-balance method to calculate your interest, meaning that the bank does not subtract the amount of your payment from the beginning balance but charges you interest on the previous balance.
- Van Buren Resources Inc. is considering borrowing $100,000 for 182 days from its bank. Van Buren will pay $6,000 of interest at maturity, and it will repay the $100,000 of principal at maturity. a. Calculate the loan’s annual financing cost. b. Calculate the loan’s annual percentage rate. c. What is the reason for the difference in your answers to Parts a and b?The Blake Company has an outstanding bank loan of P400,000 at an interest rate of 12%. The company is required to maintain a 20% compensating balance in its checking account. What is the effective interest cost of the loan? Assume that the company would not normally maintain this average amount? Format: 11%Company A is currently cash-constrained, and must make a decision about whether to delay paying one of its suppliers, or taking out a loan. They owe the supplier $23345, and they can borrow the money from Bank A, which has offered to lend the firm $23345 for 2 month(s) at an APR (compounded) of 15%. The bank will require a (no-interest) compensating balance of 7% of the face value of the loan and will charge a $216 loan origination fee, which means Hand-to-Mouth must borrow even more than the $23345. Compute the EAR of the loan. Give typing answer with explanation and conclusion
- XXX, Inc. finances tis seasonal working capital need with short-term bank loans. Management plans to borrow $65,000 for a year. The bank has offered the company a 3.5 percent discounted loan with a 1.5 percent origination fee. What are the interest payment and the origination fee requiered by the loan? What is the rate of interest charged by the bank?A person borrows $3,000 on a bank credit card at a nominalrate of 18% per year, which is actually charged at a rate of1.5% per month. a. What is the annual percentage rate (APR) for the card?(See Example 5.6.8 for a definition of APR.) b. Assume that the person does not place any additionalcharges on the card and pays the bank $150 eachmonth to pay off the loan. Let Bn be the balance owedon the card after n months. Find an explicit formulafor Bn . c. How long will be required to pay off the debt? d. What is the total amount of money the person will havepaid for the loan? If you could please answer b and d for me I put the other 2 questions there in cases they where somehow apart of b and dAutomotive Accessories needs to borrow $135,000 for 6 months for renovations. It is considering two financing options: Bank Helping Hand offers an 8% annual rate subject to a 10% compensating balance. Bank Friendly Financer offers the funds as a discount loan with an annual rate of 8%. Automotive Accessories maintains no deposit balances in either bank, and repayment will be a single lump sum at maturity. a.What is the effective annual rate of interest on each loan? b.What can Automotive Accessories do to reduce the interest rates on these loans?