uys a 6-month CD issued by a top-class bank with a tenor of 180 days at a yield of 16%. The face value at issue is GH¢10m. In 90-days time the buyer sells the CD when the 3-month secondary market for CDs issued in the names of top-class banks is 40/14.50. The buyer has held the CD for 90days, but now wants his cash back. What is the return on the investment for the
- A Treasurer buys a 6-month CD issued by a top-class bank with a tenor of 180 days at a yield of 16%. The face value at issue is GH¢10m. In 90-days time the buyer sells the CD when the 3-month secondary market for CDs issued in the names of top-class banks is 40/14.50. The buyer has held the CD for 90days, but now wants his cash back.
What is the
- Prepare a Cash
forecast for the below information
The sales and purchases for Ahemba Ltd are as follows:
Month April May June
Credit Sales $160,000 $140,000 $192,000
Credit Purchase $ 68,000 $64,000 $80,000
The company will pay wages of $8,000, $7,000 and $8,400 in April, May and June respectively. Interest payments are 3,000 per month during the period. The company will purchase equipment costing $50,000 and $4,000 in June. Ahemba Ltd estimates that 10% of its sales will be collected in the month of the sales; and the rest of its sales will be collected in the following month. Purchases on trade accounts will be paid in the month following the purchase. In March the sales were $180,000. The company has $20,000 cash at the end of March and normally keeps $10,000 minimum cash balance each month against contingencies.
- The demand for a commodity is 40,000 units a year, at a steady rate. It costs ¢20 to place an order, and 40p to hold a unit for a year. Find:a) the order size to minimise stock costsb) number of orders placed each yearc) the length of the stock cycle
2. Suppose a firm has T- bill that can be sold on the secondary market for cash each time it needs cash. The cost of discounting the T-bill is GH ¢4,000 a month, what is the optimal amount of T-bills that the firm should sell each time it needs to do so in order to optimize transaction costs and interest income
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