Options for financing its short term operations

Assignment Help Finance Basics
Reference no: EM132758894

Your company is considering three options for financing its short term operations

i. Borrow Tk.20 million from Shuktara Bank at 12 percent interest rate and a 15 percent compensating balance requirement signing a 60 day promissory note.

ii. Borrow Tk.20 million from Chandramukhi Bank at 12 percent discount interest.

iii. Forego discount on a trade credit on terms 2/15, net 45.

Strictly based on effective cost, which option would you select and why?

Reference no: EM132758894

Questions Cloud

What is the portfolio expected shortfall : What is the portfolio's expected shortfall when the confidence level is 98% and the time horizon is five days?
How you used the assumptions to calculate the wacc : You are to determine the WACC for Chippenham Hospital. Provide a brief report in which you state your determination of WACC, describe and justify.
Which accounting principle has been violate by not reporting : Which accounting principle has been violated by not reporting depreciation expense on the new warehouse for the year ended December 31, 2017.
How does a superior bond differ from a subordinate bond : How does a superior bond differ from a subordinate bond?
Options for financing its short term operations : Your company is considering three options for financing its short term operations
What is the applied overhead for the year for bambie ltd : Bambie Ltd, The actual direct labour hours used for the year turns out to be 47 000 hours. What is the applied overhead for the year?
Describe the four steps in the decision-making proces : Describe the "four steps in the decision-making process" and how a manager could use these steps to reach these top three choices. These are found in Chapter 7
Compute how much is budgeted sales revenue for third quarter : Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000. What are the total costs when 13,000 units are produced?
Attain financial breakeven point : How many mp3 players will Rancor have to sell in order attain its financial breakeven point?

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe official role of securities and exchange commission

Explain from where the Securities and Exchange Commission receives its authority. Describe the official role of the Securities and Exchange Commission in the development of financial accounting theory and practices.

  What is an auction

What is an Auction? E Bay is a market leader in online auction sites. Discuss SWOT for E bay using your web sources?.

  How much will he receive if the discount rate

If Mike decides to sell the note 5 months after the origin date, how much will he receive if the discount rate is 13.5%?

  What is the current number of education units

The marginal external cost associated with the emissions of sulfur dioxide is estimated to be $30 per pound of this chemical per year. Assume that each ton of steel produced per year results in 5 pounds of sulfur dioxide emissions. Suppose that the s..

  What is the price of the bond

What is the price of the bond? Please Submit your answers with 4 decimals after the dot.

  Finding the wacc given the following information for

finding the wacc. given the following information for janicek power co. find the wacc. assume the companys tax rate is

  Use the security market line equation and concepts to

use the security market line equation and concepts to respond to the following questionsthe risk free rate of return in

  Compute the expected rate of return for jack

A) Compute the expected rate of return for Jack. B) Compute the expected rate of return for Jill.

  Calculate the price-yield and duration of 2 year bonds

In a bond market, 1 year zero coupon bonds are selling at a yield of 6%, and 2 year bonds with 10% coupon have a yield of 8%.

  How much is the security worth today

Suppose a security will pay $1,000 three years from now. If the appropriate interest rate is 4.00% compounded annually, how much is the security worth today?

  What rate should the shop report

EAR versus APR. Ricky Ripov's Pawn Shop charges an interest rate of 13.7 percent per month on loans to its customers.

  Define problem-short-term investments

Short-Term Investments. For each of the short-term marketable securities given here, provide an example of the potential disadvantages the investment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd