How much will Singtel raise from the issue of this bill

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Question -

a. Andrew has purchased goods from a hardware supplier and has been offered trade credit terms of 1/10, n/40. Calculate the opportunity cost of trade credit in this case. Assuming that Andrew can borrower from their bank at a rate of 14%, should they take up the discount?

b. Singtel has decided to issue a $1,000,000 face value 90-day bank accepted bill into the market to fund the purchase of new machinery. The bill has a yield of 7.5% per annum.

How much will Singtel raise from the issue of this bill?

Explain the role of the discounter in the issue of a bank accepted bill?

Reference no: EM133080381

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