I believe annualized % for A : 7.5%
I believe annualized % for B: 8.4%
- Please Answer The Interest Receivable On A B I Believe Annualized For A 7 5 I Believe Annualized For B 8 4 1 (83.59 KiB) Viewed 32 times
please answer the interest receivable $ on a-b I believe annualized % for A : 7.5% I believe annualized % for B: 8.4%
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please answer the interest receivable $ on a-b I believe annualized % for A : 7.5% I believe annualized % for B: 8.4%
please answer the interest receivable $ on a-b
I believe annualized % for A : 7.5%
I believe annualized % for B: 8.4%
Sunny Coast Enterprises (A). Sunny Coast Enterprises has sold a combination of films and DVDs to Hong Kong Media Incorporated for US$114,000, with payment due in five months. Sunny Coast Enterprises has the following alternatives for financing this receivable: 1) Use its bank credit line. Interest would be at the prime rate of 5% plus 150 basis points per annum. 2) Use its bank credit line but purchase export credit insurance for a 1% fee. Because the reduced risk, the bank interest rate would be reduced to 5% per annum without any points. In both cases Sunny Coast would need to maintain a compensating balance of 20% of the loan's face amount, and no interest will be paid on the compensating balance by the bank. a. What are the annualized percentage all-in costs of each alternative? b. What are the advantages and disadvantages of each alternative? c. Which alternative would you recommend? (NOTE: Assume a 360-day year.) a. What are the annualized percentage all-in costs of each alternative? Alternative 1: Bank Credit Line The bank interest expense on the receivable is $ (Round to the nearest cent.)
I believe annualized % for A : 7.5%
I believe annualized % for B: 8.4%
Sunny Coast Enterprises (A). Sunny Coast Enterprises has sold a combination of films and DVDs to Hong Kong Media Incorporated for US$114,000, with payment due in five months. Sunny Coast Enterprises has the following alternatives for financing this receivable: 1) Use its bank credit line. Interest would be at the prime rate of 5% plus 150 basis points per annum. 2) Use its bank credit line but purchase export credit insurance for a 1% fee. Because the reduced risk, the bank interest rate would be reduced to 5% per annum without any points. In both cases Sunny Coast would need to maintain a compensating balance of 20% of the loan's face amount, and no interest will be paid on the compensating balance by the bank. a. What are the annualized percentage all-in costs of each alternative? b. What are the advantages and disadvantages of each alternative? c. Which alternative would you recommend? (NOTE: Assume a 360-day year.) a. What are the annualized percentage all-in costs of each alternative? Alternative 1: Bank Credit Line The bank interest expense on the receivable is $ (Round to the nearest cent.)