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Formative Assessment Topic 2&3 Short term & Long term Financing

Total questions: 12

Worksheet time: 8mins

Name
Class
Date
1.

What is two type sources of short-term credit?

a)

Unsecured funding and Secured funding

b)

Secured funding and sure funding

c)

Unsure funding and Unsecured funding

d)

Sure funding and Unsure finding

2.

What is Unsecured funding?

(a)  

3.

What is Secured funding?

(a)  

4.

Gives an example of unsecured funding.

(a)  

5.

Give an example of secured funding.

(a)  

6.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate Amount Received (AR).

a)

RM 451,000

b)

RM452,000

c)

RM453,000

d)

RM450,000

7.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate Amount Borrow (AB).

a)

RM607,108.11

b)

RM608,108.11

c)

RM609,000.11

d)

RM610,000.11

8.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate the interest.

a)

RM 37,000.49

b)

RM 36,000.49

c)

RM 36,486.49

d)

RM 35,000.49

9.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate the Interest.

a)

RM 37,000.49

b)

RM 36,000.49

c)

RM 36,486.49

d)

RM 35,000.49

10.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate the compensating balance (CB).

a)

RM 121,660.62

b)

RM 121,621.62

c)

RM 122,640.62

d)

RM 121,650.62

11.

Iskandar Company required additional funds of RM 450,000 to expand its business and target to settle it in 9 months. Suppose Squid Bank offers 8% for a discounted loan to Iskandar Company and needs 20% for the balance of compensation in the Squid Bank account. Calculate the effective cost (EAC/COEC).

a)

10.51%

b)

10.71%

c)

10.61%

d)

10.81%       

12.

Adi purchased bond PQR with 9 years remaining, with a 7% annual coupon interest rate and assumes that the par value is RM1000. If the required rate of return on bonds of this risk and maturity is 8%.

Determine the value of the bond and examine whether it is a discount bond, par value, or premium bond.

a)

RM937.29 / (sells at Discount bond)

b)

RM1,000 / (sells at Par value bond)

c)

 RM1,058,16 / (sells at Premium bond)

d)

RM900.29 / (sells at Discount bond)