400:49:38Your firm has an average collection period of 38 days. Current practice is to factor allreceivables immediately at a discount of 1.9 percent. Assume that default is extremelyunlikely. What is the effective cost of borrowing? (Do not round intermediatecalculations and enter your answer as a pecent rounded to 2 decimal places, e.g.,32.16.)Effective cost of borrowing19.82 % 5ts00:50:01SkippedeBookHintPrinteferencesSexton Corporation has projected the following sales for the coming year:Q1Q2Q3Q4Sales $970 $1,050 $1,010 $ 1,110Sales in the year following this one are projected to be 15 percent greater in eachquarter.a. Calculate payments to suppliers assuming that the company places orders duringeach quarter equal to 30 percent of projected sales for the next quarter. Assume thatthe company pays immediately. (Do not round intermediate calculations and roundyour answers to 2 decimal places, e.g., 32.16.)b. Calculate payments to suppliers assuming a 90-day payables period. (Do not roundintermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)c. Calculate payments to suppliers assuming a 60-day payables period. (Do not roundintermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)a. Payment of accountsb. Payment of accountsc. Payment of accountsQ1Q2Q3Q4

“Since you have posted multiple questions, we will provide the solution only to the first question…

Your firm has an average collection period of 38 days. Current practice is to factor all receivables immediately at a discount of 1.9 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? (Do not round intermediate calculations and enter your answer as a pecent rounded to 2 decimal places, e.g., 32.16.) Effective cost of borrowing 19.82 %

Your firm has an average collection period of 38 days. Current practice is to factor all receivables immediately at a discount of 1.9 percent. Assume that default is extremely unlikely. What is the effective cost of borrowing? (Do not round intermediate calculations and enter your answer as a pecent rounded to 2 decimal places, e.g., 32.16.) Effective cost of borrowing 19.82 %

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

See similar textbooks

Similar questions

Examine the points versus no points chart to respond to the following query: Determine the percentage that the total interest paid will drop from buying no points to three points. To the closest hundredth, round the final response.
A company has a collection period of 33 days and factors all receivables immediately at a discount of 2.3 percent. What is the effective annual cost of borrowing? Assume 365 days per year. Multiple Choice 29.35% 27.01% 26.04% 28.60% 25.42%
Explain the Formula Otherwise I will dislike.. 1) A credit card company charges an interest rate of 1.13% per quarter on the unpaid balance of all accounts. What would be the effective rate of interest per year being charged by the company? The annual effective rate would be 4.52% The annual effective rate would be 4.60% The annual effective rate would be 4.13% The annual effective rate would be 1.13%
Which results in a lower total interest charge, borrowing $1 comma 5201,520 to be repaid 12 months later as a single-payment loan or borrowing $1 comma 5201,520 to be repaid as a 12-month installment loan? Assume a simple interest method of calculation at 11.5011.50 percent interest. Defend your answer. Note: Round intermediate computations to at least five (5) decimal places. Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table: 1. Question content area bottom Part 1 The amount of interest on the single-payment loan is $enter your response here. (Round to the nearest cent.) Part 2 The amount of interest on the 12-month installment loan is $enter your response here. (Round to the nearest cent.) Part 3 Why does the 12-month installment loan result in lower interest charges? (Select the best choice below.) A. Interest costs are higher when you have the use of the entire $1 comma 5201,520 for the full year…
None
Two types of borrowers, type A and B, are requesting a loan in the amount of $44,000. Type A repays with prob. 1, while type B repays with prob. 0.76. If a bank cannot observe type, but believes that fraction 0.8 of the borrower pool is type A, then what is the competitive pooling rate the bank can offer these borrowers? 8.7% 7.7% 6.5% 5.0%
Consider a borrower who took a loan worth 10000 at the beginning of period 1. The loan is to be repaid over 20 periods. Furthermore, assume that the interest rate is equal to 5%. How much does the borrower owe in debt at the beginning of period 3? Don't use Excel
The bank made a 3-year loan 7% discount rate, with no coupons and a par value of $1,000. If immediately after the loan was made, because of higher inflation expectations, the discount rate increased to 9%. What is the effect of the interest rate change on the value of the loan? (a) Declines by 1.94% (b) Increases by 5.4% (c) Increases by 2.0% (d) Declines by 5.4%
(Related to Checkpoint 18.2) (Evaluating trade credit discounts) If a firm buys on trade credit terms of 5/15, net 90 and decides to forgo the trade credit discount and pay on the net day, what is the annualized cost of forgoing the discount (assume a 365-day year)? The annualized cost of the trade credit terms of 5/15, net 90 is %. (Round to two decimal places.)
Optimizing economic agents use the real interest rate when thinking about the economic costs and returns of a loan. Suppose the average rate paid by banks on savings accounts is 0.45% at a time when infialion is around 0 9% For the average saver, the real rate of interest on his or her savings is % (Round your response to two decimal places and use a minus sign if necessay.) Il banks expect that the rate of inflation in the coming year will be 3.9% and they want a real return of 8% on a certain category of loans, then the nominal rate they should charge borrowers on those loans is %. (Round your response to two decimal places) 11 the economy experiences an unexpectedly high rate of inflation, the group that would tend to benefit is O A. creditors (people or institutions that are owed money). O B. deblors (pcople or businesses who owe moncy). OC. both would benefit cgqually O D. neilher bencfits.
Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 4.23% and ϕ = 3.16%. b. Charges a 0.33 percent loan origination fee to the borrower. c. Imposes a 9 percent compensating balance requirement to be held as noninterest-bearing demand deposits. d. Holds reserve requirements of 8 percent imposed by the Federal Reserve on the bank’s demand deposits. Calculate the bank’s ROA on this loan.
Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.) (Use 15.5% for table lookup.) (Use the loan amortization table.) (Round your answers to the nearest cent.) Purchase priceof a used car Downpayment Number ofmonthly payments Amountfinanced Total of monthlypayments Total financecharge APR $4,415 $85 60 $4,330 $6,164.00 $1,834.00 15.5% Monthly Payment By table By formula

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS