general accounting Your consulting firm has an average collection period of 42 days. Thecurrent practice is to factor all receivables immediately at a 1.5 percentdiscount. Assume default is extremely unlikely.Required:Calculate the effective cost of borrowing.

Step 1: Define Effective Cost of BorrowingThe effective cost of borrowing refers to the actual cost…

Answered: Your consulting firm has an average…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the effective cost of borrowing?
Your firm has an average collection period of 27 days. The current practice is to factor all receivables immediately at a discount of 2.2 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? (365 in year) please answer me
Your firm has an average collection period of 27 days. The current practice is to factor all receivables immediately at a discount of 2.2 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? (365 in year)
A loan has quarterly payments. The APR is 16%, and interest is compounded 12 time(s) per year. The effective interest rate that would be needed to find the payment amount for the loan is _%. Margin of error for correct responses: +/-.02 (%) Rounding and Formatting instructions: Do not enter dollar signs, percent signs, commas, X, or any words in your response. Do not round any intermediate work, but round your *final* response to 2 decimal places (example: if your answer is 12.3456, 12.3456%, or $12.3456, you should enter 12.35).
Your firm has an average collection period of 27 days. The current practice is to factor all receivables immediately at a discount of 2.2 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? (365 in year) please answer me fast this accounting question
A consumer loan requires monthly payments, in equal amounts, $700.00. The next payment is due in one month. Assume that the appropriate discount rate is 21% (APR). What is the effective annual rate? (show them in excel spreadsheet, write your own present value formulas, don't use Excel built-in functions.
An FI has estimated the following annual costs for its demand deposits: management cost per account = $150, average account size = $1600, average number of cheques processed per account per month = 75, cost of clearing a cheque = $0.10, fees charged to customer per cheque = $0.05, and average fee charged per customer per month = $15. (a) What is the implicit interest cost of demand deposits for the FI? (b) If the FI has to keep an average of 8 per cent of demand deposits as required reserves with the RBA paying no interest, what is the implicit interest cost of demand deposits for the FI? (c) What should be the per-cheque fee charged to customers to reduce the implicit interest costs to 3 per cent? Ignore the reserve requirements.
An FI has estimated the following annual costs for its demand deposits: management cost per account = $150, average account size = $1400, average number of cheques processed per account per month = 65, cost of clearing a cheque = $0.10, fees charged to customer per cheque = $0.05, and average fee charged per customer per month = $10.(a) What is the implicit interest cost of demand deposits for the FI?(b) If the FI has to keep an average of 6 per cent of demand deposits as required reserves with the Central Bank paying no interest, what is the implicit interest cost of demand deposits for the FI?(c) What should be the per-cheque fee charged to customers to reduce the implicit interest costs to 2 per cent? Ignore the reserve requirements.
A loan officer is preparing the documents for a commercial term loan. The borrower's risk profile suggests that an annualized return ( EAR) of 6.3% is appropriate. The loan will require semi - annual payments, i .e., one payment every six months. What APR (compounded semi - annually) should be used to compute the borrower's future payments? ( please show the results in excel spreadsheet also)
A loan officer is preparing the documents for a commercial term loan. The borrower's risk profile suggests that an annualized return (EAR) of 6.3% is appropriate. The loan will require semi-annual payments, i.e., one payment every six months. What APR (compounded semi-annually) should be used to compute the borrower's future payments? (please show the results in excel spreadsheet also)
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Maximum Bank has analyzed the accounts receivable of Scientific Software, Inc. The bank has chosen eight accounts totaling $134,000 that it will accept as collateral. The bank’s terms include a lending rate set at prime 3% and a 2% commission charge. The prime rate currently is 8.5%. 1.The bank will adjust the accounts by 10% for returns and allowances. It then will lend up to 85% of the adjusted acceptable collateral. What is the maximum amount that the bank will lend to Scientific Software? Format: 111,111 2.What is Scientific Software’s effective annual rate of interest if it borrows $100,000 for 12 months? (Note: Assume a 365- day year and a prime rate that remains at 8.5% during the life of the loan.) Format: 11.1%

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Your consulting firm has an average collection period of 42 days. The current practice is to factor all receivables immediately at a 1.5 percent discount. Assume default is extremely unlikely. Required: Calculate the effective cost of borrowing.