Reference no: EM133019843
Question - A company has a credit line that has both interest charges and commitment fees. Calculate their average loan outstanding and costs on this credit line based on the following information:
Maximum Operating Credit Line = $4,000,000
Interest Charges are calculated using an 8% per annum rate, with interest payable monthly on any used portion. (To simplify, assume no interest is charged on interest due, as it is to be paid for immediately from cash available.)
Commitment fees are calculated based on a 1% per annum rate, with fees payable monthly on any unused portion.
The firm uses $4,000,000 in January through April, $2,500,000 in May through July, and $1,400,000 in the months of August through December.
Required -
1. What the average amount of the outstanding loan to the nearest dollar?
2. What the dollar cost of interest charges for the year?
3. What the dollar cost of commitment fees for the year?
|
Recommendation of firing an employee for unethical behavior
: Provide an ethical reasoning for recommendation of firing an employee for unethical behavior
|
|
What is Star Corp total taxable income for the year
: Star Corp., a publicly traded, accrual-method C corporation, had the income in 2020: Muni bond interest: $101,691. What is Star Corp total taxable income
|
|
Calculate and prepare cash flows from investing activities
: A gain on sale of plant $18,000 was recorded in the profit or loss statement. Calculate and prepare Cash Flows from Investing Activities
|
|
Similarities and differences between micro-level practice
: Discuss the similarities and differences between micro-level practice (working with individuals and groups) and mezzo-level practice (working with organizations
|
|
What the dollar cost of commitment fees for the year
: The firm uses $4,000,000 in January through April, $2,500,000 in May through July, What the dollar cost of commitment fees for the year
|
|
Vision and mission statements of the company
: 1. Under the POCD framework, this refers to the vision and mission statements of the company:
|
|
Prepare a Cash Budget for the quarter ending September
: The cash balance at 1 July 2020 is expected to be $10,500. Prepare a Cash Budget for the quarter ending 30 September 2020
|
|
How you went about it and how successful you were
: Give an example of when you had to convey good news to your team.
|
|
What is the income of the bond portfolio
: Assuming the swap is accepted, what is the income of the bond portfolio if the LIBOR rate increases to 6% in one year's time
|