Determining the annual financing cost of borrowingpyramid

Assignment Help Financial Accounting

Reference no: EM13356693

Determining the annual financing cost of borrowing.

Pyramid Products Company has a revolving credit agreement with its bank The Company can borrow up to $1 million under the agreement at an annual interest rate of 9%. Pyramid is required to maintain a 10% compensating balance on any funds borrowed under the agreement and to pay a .5% commitment fee on the unused portion of the credit line. Assume that Pyramid has no funds in the account at the bank that can be used to meet the compensating balance requirement. Determine the annual financing cost of borrowing each of the following amounts under the credit agreement:

a. $250,000
b. $500,000
c. 1,000,000

Reference no: EM13356693

Questions Cloud

Break-even-analysisacme co manufactures a product that : break-even-analysisacme co. manufactures a product that sells for 12 per unit. total fixed costs are 96000 and variable

Cvp analysis giving decision if the price is reducedtechnos : cvp analysis giving decision if the price is reduced.technos marketing research shows that if they reduce their selling

Capital structure decisions1nbspthe cost of capital for a : capital structure decisions1.nbspthe cost of capital for a project depends primarily on thea. firms overall source of

Effect of capital structure on companies value per shareas : effect of capital structure on companies value per share.as a way of illustrating the usefulness of the mampm theory

Determining the annual financing cost of borrowingpyramid : determining the annual financing cost of borrowing.pyramid products company has a revolving credit agreement with its

Calculating additional finance requirementsthe cfo of ipod : calculating additional finance requirements.the cfo of ipod accessories inc. has asked for your help in estimating the

Calculating additional finance requirementsappalachian : calculating additional finance requirements.appalachian registers inc. ari has current sales of 50 million. sales are

Calculating additional finance requirements amp average : calculating additional finance requirements amp average collection period.baldwin products co. anticipates reaching a

The question is regarding working capital management : the question is regarding working capital management involving computation of inventory needed.abc corp. is required by

User Account

All Pages