What is the commercial papers effective annual rate

Assignment Help Financial Management

Reference no: EM131884644

1. Bravo Corporation recently issued 270-day commercial paper with a face value of $2,000,000 and a simple interest rate of 11 percent. The company paid a transaction fee equal to 0.4 percent of the issue, which was taken out of the issue amount before the company received any funds.

Assuming there are 360 days in a year, what is the commercial paper's effective annual rate (rEAR)? (Round your answer to two decimal places.)

2. Kerry Corporation is planning to get a 270-day $500,000 simple interest loan from its bank at a quoted interest rate of 12 percent. If the bank has a 20% compensating balance requirement and Kerry currently holds no funds at the lending bank, what is the effective annual rate (EAR) of the loan? (Assume there are 360 days in a year. Round your answer to two decimal places.)?

3. A revolving credit agreement is:

created because of recurring short-term liabilities such as wages and taxes that change spontaneously with operations.

the credit created when one firm buys on credit from another firm.

an outright sale of receivables.

an unsecured, short-term promissory note issued by large, financially sound firms to raise funds.

a formal, committed arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period.

Reference no: EM131884644

Questions Cloud

How do you fully define a conical or flat taper : How do you fully define a conical or flat taper? How do you tolerance it? Which ASME tolerance rule should you use to show dimension limits on a drawing?

Find how valuable you are to a business that you spend money : For the first homework question -- Find how valuable you are to a business that you spend money at on a regular basis.

List the three types of material conditions : List the three types of material conditions. Explain each type. What is a datum? Why do we need them? How is a datum defined?

What is the semi-annually compounded interest rate : What is the semi-annually compounded interest rate if $200 accumulates to $318.77 in eight years? Answer in percentage with two decimal places.

What is the commercial papers effective annual rate : Assuming there are 360 days in a year, what is the commercial paper's effective annual rate (rEAR)?

List the sources of variability in manufacturing : List the sources of variability in manufacturing. Why do we need tolerances? List the two types of tolerances. What does each type control?

What are the benefits of creating a drawing template : What are the benefits of creating a drawing template? What does a typical BOM show? How useful is the associativity between a model and its drawings?

What is the profit margin percent : If 20,000 units are sold for $15 and they cost $3 each, along with marketing and administrative expenses of $100,000 and $75,000 respectively.

What content does a drawing typically hold : Why is dimensioning a drawing important? Are abbreviations good to use in drawings? Why or why not? What content does a drawing typically hold?

User Account

All Pages