What effective annual rate will the firm pay for financing

Assignment Help Financial Accounting
Reference no: EM132490238

Cost of commercial paper - Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 102-day commercial paper with a face value of $0.8 million. The firm has received initial proceeds of $775,047 (Note: a 365-day year).

Question a. What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 102 days throughout the year?

Question b. if the brokerage fee of $7,711 was paid from the initial proceeds to an investment banker for selling the issue, what effective annual rate will the firm pay, assuming that the paper is rolled over every 102 days throughout the year?

Reference no: EM132490238

Questions Cloud

Prepare a record the payment of interest on june : Record the sale of the bonds on January 1, 2014, and the payment of interest on June 30, 2014, using effective-interest amortization.
Describe the stages of meiosis in eukaryotic cells : Describe the stages of meiosis in eukaryotic cells realizing that there are two cell divisions involved, each having their particular terms and characteristics.
Calculate the dollar cost of each of the proposed plans : Calculate the dollar cost of each of the proposed plans for obtaining an initial loan amount of $149,000. which plan do you recommend? Why?
Calculate the goodwill that would be created : Calculate the goodwill that would be created if Company (X) paid altogether $200 cash for Company (Y) ($100 immediately and $100 in 6 months).
What effective annual rate will the firm pay for financing : What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 102 days throughout the year?
How does cell division differ in prokaryotes and eukaryotes : Clearly, these differences may be difficult for the prokaryotes in the jury to follow unless you show the similarities and differences.
What is the approximate heritability of male horn : What is the approximate heritability (h2) of male horn length and why?
Calculate the effective annual rate of interest on each loan : What could Weathers do that would reduce the effective annual rate on the State Bank loan? Calculate the effective annual rate of interest on each loan.
What margin of safety in dollars would be : If Burkett Corporation is able to achieve the budgeted level of sales, its margin of safety in dollars would be (Do not round intermediate calculations.)

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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