User Account

All Pages

What is the effective annual cost of the rbc operating line

Assignment Help Accounting Basics
Reference no: EM133125466

Question - RBC has recently offered AGC a one-year $2 million operating line of credit (LOC) at a rate of 6.25% in anticipation for year 2020. There is a monthly 0.75% commitment fee on the unused amount. AGC is considering taking this LOC, and wants to estimate its cash needs for the month of September 2020.

The owner is looking for at least two other short-term financing options AGC could employ to assist with future cash flow shortages.

He does not understand how revolving loans work and how they are beneficial to AGC. Explain.

The owner estimates that if AGC takes the LOC, it will borrow only $1.25 million during January-September 2020 and further reduce by $0.2 million for the remaining 3 months.

What is the effective annual cost (in percent) of the RBC operating line of credit arrangement?

Reference no: EM133125466

Questions Cloud

Product possibilities curve worksheet : Here is the production possibilities table for war goods and civilian goods: Production Alternative Types of Production A B C D E Automobiles 0 2 8 Missiles 30
Achieve a desired payoff : The order of play tends to matter in sequential games where rivals must predict best reply-responses and counter-responses in order to achieve a desired payoff.
Evaluate different compensation packages : You have offices in several countries, so how would you evaluate different compensation packages for employees who are located throughout the world?
Define and compute total fertility rate : Use the following information for the questions on this page. In some country 1/3 of people die at age 1, 1/3 die at age 30 and the rest at age 80.
What is the effective annual cost of the rbc operating line : The owner estimates that if AGC takes the LOC, it will borrow only $1.25 million. What is the effective annual cost of the RBC operating line
Can we limit progress only to its economic dimension : Can we limit progress only to its economic dimension?
Interest rates and consumption spending : Think about the income and substitution effects of a rise in the interest rate, as analysed in Exercise 10.2 and 10.3. Comment on whether a rise in the interest
What role does keynes assign to effective demand : What role does Keynes assign to effective demand in The General Theory? Why is consumption different from investment?
Remarkable gift exchange experiment : In a remarkable gift exchange experiment, results showed that rewarding workers with a surprise gift of a bottle of wine resulted in greater effort levels

Reviews

Write a Review

Accounting Basics Questions & Answers

  The market price of the warrants without the bonds

The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bonds and warrants.

  Prepare the journal entries on burnaby books

The market rate is currently 6%. Burnaby prepares financial statements in accordance with IFRS. Prepare the journal entries on Burnaby's books

  Discuss the benefits of a standard costing system

Overhead is applied on the basis of direct labor dollars. We have found that variable overhead averages about 116 percent of our direct labor cost.

  Find the amount of dividends payable reported as a liability

There are also 100,000 shares of $1 par value common stock outstanding. The amount of dividends payable reported as a liability on the balance sheet is

  Discuss the parallels the progressive movement

Discuss the parallels between the Progressive Movement of the 1900s and the Progressive Movement today. Is history repeating itself?

  Identify any relevant theory that applies to the question

identify any relevant theory that applies to the question

  Why might cooperation emerge from a repeated game

Suppose you were hired to advise Pipetran about its choice of capacity. If Pipetran has the option of moving first, should it do so? Explain.

  Estimate the issue price of the bonds

Using a financial calculator or excel, estimate the issue price of the bonds under the following three assumptions: (1) Market Rate is 9% (2) Market Rate is 8%

  Define german activities and makes no dividend distributions

GreenCo earns $1,500,000 in net profits from its German activities and makes no dividend distributions to BlueCo

  What selling price per unit will this company require

Billy Company has just received a special, one-time order for 1,000 units. What selling price per unit will this company require to earn $3,000 on the order

  What governing bodies set accounting standards

Financial statements are prepared in accordance with what? What governing bodies set accounting standards? Why do you think financial statements are required to be prepared using the same standards?

  Explain how the supervisor might communicate to department

Explain how the supervisor might communicate to his or her department (of all male employees) when a female is about to become part of the work team.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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