A borrower has two alternatives for a loan: (1) issue a $510,000, 45-day, 8% note or (2) issue a $510,000, 45-day note that the creditor discounts at 8%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. b. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar.. (1) $510,000, 45-day, 8% interest-bearing note: $ (2) $510,000, 45-day note discounted at 8%: $ $ c. Alternative is more favorable to the borrower because the borrower
A borrower has two alternatives for a loan: (1) issue a $510,000, 45-day, 8% note or (2) issue a $510,000, 45-day note that the creditor discounts at 8%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. b. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar.. (1) $510,000, 45-day, 8% interest-bearing note: $ (2) $510,000, 45-day note discounted at 8%: $ $ c. Alternative is more favorable to the borrower because the borrower
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter6: Using Credit
Section: Chapter Questions
Problem 9FPE
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