Official development assistance , Financial Accounting

Assignment Help:

1. To qualify as official development assistance (ODA), development loans must have a grant element of at least 25 percent, calculated using a stated annual interest rate of 10 percent. After the Solomon Islands earthquakes, new US Secretary of State John Kerry toured the quake-stricken country and promised the following loan: $100 million, to be amortized over 6 years by 12 semi-annual payments, after a grace period of 4 years during which only interest would be paid semi-annually. The US would charge interest at a stated annual rate of 6 percent. Determine whether or not this loan would qualify as ODA. What is the maximum interest rate the US could charge for this loan to qualify as ODA?

2. One of the projects the US loan would fund is to build earthquake-resistant buildings. The project will begin in March 2013, last for two years and is expected to have the following expenditures: start-up costs of $200,000 paid at the beginning of the first month; rental of equipment to be paid at the beginning of the month that will be $100,000 each month for the first year, but $50,000 each month for the second year;

material costs to be paid at the end of each month that will be $30,000; personnel costs of

$100,000 to be paid at the end of each month; and end-of-project clean-up costs of

$100,000 that will be paid at the end of the last month (February 2015). Suppose that with the fiscal cliff looming in March 2013, Secretary Kerry is only willing to allocate

$3,000,000 of the US loan at the start of the project due to this concern. These funds are put into an account that pays interest at a stated annual rate of 12 percent, compounded monthly. Calculate how much this project needs at the beginning of the second year that would be necessary to cover its expected expenditures.

 

 

 


Related Discussions:- Official development assistance

Executors accounts-executor laws and accounts, EXECUTORS' ACCOUNTS (a) ...

EXECUTORS' ACCOUNTS (a) Stewardship : The main object or preparing Estate Accounts is to record the assets which have been entrusted to the "stewards" — the executors — and

Introduction to pension funds, Introduction to Pension funds Pension fu...

Introduction to Pension funds Pension funds are normally set up to provide pension benefits to employees who have retired. The pension funds receive contributions mainly from e

Holding company with more than one subsidiary company, Holding company with...

Holding company with more than one subsidiary company Under this type of structure, the holding company controls more than one company. For example H ltd may Own 80% of S1, 75%

Significance in working capital cycle, For several firms trade payables - s...

For several firms trade payables - suppliers of goods and services - represent the major component of current liabilities the amounts owed by the company which have to be repaid wi

What you understand by the term gender budgeting, Question 1: (a) "MT...

Question 1: (a) "MTEF is about resource control, resource allocation and resource utilization." You are required to identify and discuss the different stages of MTEF. (N

Explain the term reporting interval - management accounting, Explain the te...

Explain the term Reporting interval - Management accounting For most businesses, financial accounting reports are produced on an annual basis, though some large businesses prod

Describe accounting concept of a business combination, Describe the account...

Describe the accounting concept of a business combination. Business Combination: According to International Financial Reporting Standard-3 Business Combinations "A busi

Compare the alternatives on a total-annual-cost , The Rohr Company's old eq...

The Rohr Company's old equipment for making subassemblies is worn out. The company is considering two alternatives: a) Completely replacing the old equipment with new equipment

What should Peter do? Suggest alternative courses of action, Peter has wor...

Peter has worked for five years as an assistant accountant for a large garage and vehicle repair workshop. In the past two weeks he has noticed that one of the managers, Simon, ha

concept of financial accounting, Concept of  financial Accounting Ac...

Concept of  financial Accounting Accounting is the art of recording, classifying and summarizing the business transactions and events. Double Entry System is the base for reco

Write Your Message!

Captcha
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