What is the effective annual interest rate of this trade credit?

Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 40, and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest cent. 24 What would be the nominal cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. What would be the effective cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. % If the company could get the funds from a bank at a rate of 12%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? Do not round intermediate calculations. Round your answer…

Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 50, and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest cent. 2$ What would be the nominal cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. % What would be the effective cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. % If the company could get the funds from a bank at a rate of 9%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? Do not round intermediate calculations. Round your answ…

A pulp and paper company is planning to set aside $150,000 now for possibly replacing its large synchronous refiner motors. If the replacement isn’t needed for 8 years, how much will the company have in the account if it earns interest at a rate of 8% per year?

Pool-N-Patio World needs to borrow $70,000 to increase its inventory for the upcoming summer season. The owner is confident that he will sell most, if not all, of the new inventory during the summer, so he wishes to borrow the money for only four months. His bank has offered him a simple interest amortized loan at 7 3/4 % interest. (Round your answers to the nearest cent.) (a) Find the size of the monthly bank payment.$ (b) Prepare an amortization schedule for all four months of the loan. PaymentNumber PrincipalPortion InterestPortion TotalPayment BalanceDue 0       $ 1 $ $ $ $ 2 $ $ $ $ 3 $ $ $ $ 4 $ $ $ $

A pulp and paper company is planning to set aside $150,000 now for possibly replacing its large synchronous refiner motors. If the replacement isn’t needed for 5 years, how much will the company have in the account provided it earns a market rate of 10% per year and the inflation rate is 4% per year?

The Anderson Ltd. manufacturing company is a small manufacturer of plastic products. She needs to purchase an extrusion machine for$150,000. Anderson ltée will borrow money from a bank at an interest rate of7%over five years. The company expects its sales to be low in the first year, but will subsequently increase at an annual rate of10%. The company therefore arranges with the bank to repay the loan with payments increasing by10%per year. Determine the five annual payments. (Hint, you have to find the first payment).

Ace Development Company is trying to structure a loan with the First National Bank. Ace would like to purchase a property for $3.50 million. The property is projected to produce a first year NOI of $140,000. The lender will allow only up to an 80 percent loan on the property and requires a DCR in the first year of at least 1.25. All loan payments are to be made monthly but will increase by 3.5 percent at the beginning of each year for five years. The contract rate of interest on the loan is 5.5 percent. The lender is willing to allow the loan to negatively amortize; however, the loan will mature at the end of the five-year period. Required: a. What will the balloon payment be at the end of the fifth year? b. If the property value does not change, what will the loan-to-value ratio be at the end of the five-year period? Complete this question by entering your answers in the tabs below. Required A Required B What will the balloon payment be at the end of the fifth year? (Do not round…

A buyer is considering purchasing a 10-acre parcel in Peoria, Arizona for economic development. The parcel has a sales price of $720,000. The buyer agrees with the seller for purchasing the property with 15% down up front and paying off the balance in 12-months. If a bank is willing to provide 3% annual interest, compounded monthly, how much should the monthly deposit be into that account to pay off the desired balance to the seller?

Your company is considering the purchase of a fleet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. The corporate tax rate is 34%. The cars belong in CCA class 10 (a 30% class). What is the break-even lease payment?   Select one:   a.   $47,328   b.   $57,705   c.   $35,675   d.   $55,000   e.   $56,128