Calculate the effective annual rate

Assignment Help Financial Management

Reference no: EM131178772

Haidong, a Taiwanese contract manufacturer, has experienced an upsurge in business. High- cost Japanese electronics firms have been outsourcing manufacturing lately, and Haidong has landed some big contracts in recent months. To support its working capital needs, Haidong seeks bank financing of Taiwanese dollar (TWD) 200 million for 180 days. Through its Japanese associates, Haidong is in contact with two Japanese banks offering JPY loans to Asian firms at competitive rates. The two quotes are summarized in the following table.

Bank Stated Rate Interest Convention Compensating Balance

Mizuho 3.5% actual/ 360 simple 10%

Shinsei 3.6% Annual compounding 8%

Assume spot TWDJPY equals 3.87. Calculate the effective annual rate for Mizuho Bank. Format x.xx%.

Reference no: EM131178772

Questions Cloud

Find a counterexample for each statement that is false : For each prove each statement that is true and find a counterexample for each statement that is false. Assume all sets are subsets of a universal set U.

Describe how christians should react to the circumstances : Does the economic component of this story mesh with your understanding of how Christians should react to the circumstances? Provide details to support your position.

Poisson or the exponential distributions : Say that a restaurant is trying to figure out the efficiency of its servers and discovers the number of parties served by one server in an hour period follows a Poisson distribution with a mean of 12. Include cdf notation when appropriate. You may..

Ounce cans of pineapple juice : At a supermarket, pineapple juice sells at $1 per pint (16 ounces). Greg wants to buy eighteen 40 ounce cans of pineapple juice from the supermarket. How much does he have to pay altogether?

Calculate the effective annual rate : Haidong, a Taiwanese contract manufacturer, has experienced an upsurge in business. High- cost Japanese electronics firms have been outsourcing manufacturing lately, and Haidong has landed some big contracts in recent months. Calculate the effective ..

Trade-off between overtime costs and inventory costs : What options are open to Coral to address this problem - How would reducing the minimum quantity of subassemblies help?

Examine best business organizational form for the business : Describe a business that you may own some day or that you currently own. (Even if you never plan to own a business, pretend as if you will do so for the purposes of this assignment.) Examine the best business organizational form for the business t..

Prove that in any group of six actors : Using graph theory: say that two actors are co-stars if they have been in the same movie. Prove that in any group of six actors, we can either find a group of three such that all pairs in the group are co-stars, or a group of three so that no two..

Write any kind of work experience that you have had in life : In this first assignment we ask you, therefore, to write 600 words on any kind of work experience that you have had in your life so far. It is a first exercise with which we learn to reflect on work and employment and our own experiences are alway..

User Account

All Pages