Short Term Financing

What is the cost of giving up the cash discount of credit term 2/15 net 30

• 0.324

• 3.24

• 32.4

• 0.0324

What is the cost of giving up the cash discount of credit term 5/20 net 40

• 9.6053

• 0.0961

• 0.9605

• 0.9560

What is the cost of giving up the cash discount of credit term 4/15 net 35

• 0.7640

• 0.7406

• 0.6704

• 0.7604

What is the cost of giving up the cash discount of credit term 7/20 net 60

• 0.6868

• 6.8667

• 0.6886

• 0.8668

What is the cost of giving up the cash discount of credit term 8/30 net 50

• 0.1587

• 1.5870

• 0.5871

• 0.1578

What is the cost of giving up the cash discount of credit term 5/30 net 50

• 0.9605

• 0.6905

• 0.5906

• 0.5609

Sharina wishes to borrow RM20,000 for one year. The bank offers a simple interest loan at 14% per annum. Calculate the effective annual interest cost of the loan.

• 41%

• 14%

• 16%

• 20%

Moulud wishes to borrow RM50,000 for one year. The bank offers a simple interest loan at 10% per annum, and requires Moulud to maintain a compensating balance of 15% of the loan amount. If Moulud has no money available for the compensating balance, what is the cost to Moulud of taking up such a loan?

• 12.36%

• 14.56%

• 11.76%

• 10.55%

Anjung Industrise plans to sell RM200 million in 250 day maturity paper on which the expected discounted interest to be paid is 10% per annum. The firm also expects to incur RM200,000 in dealer placement fees and other expenses of issuing the paper. Calculate the cost of issuing commercial paper.

• 10.91%

• 19.10%

• 10.19%

• 11.19%

M&M Chocolates plans to sell RM150 million in 290 day maturity paper on which the expected discounted interest to be paid is 12% per annum. The firm also expects to incur RM90,000 other expenses of issuing the paper. Calculate the cost of issuing commercial paper.

• 11.23%

• 14.56%

• 13.38%

• 12.56%