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Business

Finance

is the market v

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Question

Honesty Company is investing in 5-year treasury bills with a face value of P500,000 and annual interest rate of 5%.
How much is the market value assuming a 360 days in a year?

Honesty Company is investing in 91-day treasury bills with a total fair market value of P2,500,000 for a purchase price of P2,475,000.
What is the annualized discount rate (round off your answer to two decimal places)?

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Step 1Given FV =500000, Interest %=5=0.05=K

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Step 2 Q.2 Given days of investment =91, one year =360 days

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