User Account

All Pages

What would be the effective cost of the bank loan

Assignment Help Finance Basics
Reference no: EM131106265

Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 60; and it currently pays after 5 days and takes discounts. Lamar plans to expand, which will require additional financing. If Lamar decides to forgo discounts, how much additional credit could it get and what would be the nominal and effective cost of that credit? If the company could get the funds from a bank at a rate of 10%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan, and should Lamar use bank debt or additional trade credit? Explain.

Reference no: EM131106265

Questions Cloud

How many containers are needed for gadjits : a. How many containers are needed for gadjits? b. How many containers are needed for widjits?
Comparing one fast server to several slow servers : In Example 13.4 of section 13.5, we examined whether an M/M/1 system with a single fast server is better or worse than an MMs system with several slow servers.
Amortize premium or discount on interest dates : Sanford Co. sells $500,000 of 10% bonds on March 1, 2010. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2013. The bonds yield 12%. Give entries through December 31, 2011.
Explain the impact of databases on businesses : Explain the impact of databases on businesses. What industry has databases made possible? Give examples of database supported business applications or technology.
What would be the effective cost of the bank loan : what would be the nominal and effective cost of that credit? If the company could get the funds from a bank at a rate of 10%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan, and should Lamar use bank..
Same recommendation on which machine to purchase : Simulate the system in Problem 10. Make any assumptions about the warm-up time and run time you believe are appropriate. Try solving the problem with exponentially distributed copying times.
What is normalization and explain why it is important : Write the SQL SELECT statement to display the average rent of the properties. What is normalization? Explain why it is important. List and describe the 4 components of a database system.
Within an arm reach of desire : The ability to engage in global branding is a key advantage to any large company. Coca-Cola is fortunate in that it possesses a number of instantly recognisable icons which go beyond the familiar taste of its product. In particular the Company ben..
Show that every compact metric space is separable : A topological space is called separable if it contains a countable dense subset. Show that euclidean space Rn is separable. Show that every compact metric space is separable

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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