Memphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suitable trade credit terms. Because of Memphis Metro’s strong balance sheet and stellar credit rating, the firm’s most recently issued line of credit is priced at 3.65 percent. Calculate the present value of this cash outflow assuming trade credit terms of 30 days; 45 days 60 days Please use Excel to explain, and show the Excel formula.

A $5000 short-term loan was received on December 3 rd 2018. This loan is scheduled to be repaid as nine uniform weekly payments. A grace period is granted for 5 weeks during which no repayments are required. The first repayment took place on January 7th and should go on for 8 more weekly payments. a] Create a cash flow diagram of the loan showing both the money received as loan and, in symbols, money paid back to the lender (R/week). b] What is the weekly payment if the contract says that the nominal interest rate on this loan is 30% compounded daily? In this part, please make the assumption that the 5 week grace period is interest-free. That is, the value of time during the grace period is zero. Starting from January 7th time value of money follows the contract. c] How much would the weekly payment be had the grace period not been interest free? That is, imagine now that time value of money follows the contract from December 3

Data​ Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15​%, payable at maturity.​ (Note: Assume a​ 365-day year.)   a. How much interest​ (in dollars) will the firm pay on the 90​-day loan? b. Find the 90-day rate on the loan. c. Annualize your result in part b to find the effective annual rate for this​ loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances.   Answers a. The amount of interest on the loan is $___.​ (Round to the nearest​ cent.) b. The effective 90-day rate is___%.​ (Round to two decimal​ places.) c. The effective annual rate is___%.​ (Round to two decimal​ places.)

Bird's Eye Treehouses, Incorporated, a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 1.5 days. Assume 365 days a year. Average number of payments per day Average value of payment Variable lockbox fee (per transaction) Annual interest rate on money market securities 880 $830 $.10 3.2% a. What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose in addition to the variable charge that there is an annual fixed charge of $3,000 to be paid at the end of each year. What is the NPV now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely…

cO X HAS cASH BALANCE OF $33 AND SHORT TERM LOAN BALANCE OF $200 AT THE BEGINNING OF QTR 1. THE NET CASH INFLOW FOR THE 1ST QTR IS $89 AND THE FOR THE SECOND QTR THERE IS A NET CAHS OUTFLOW OF $44. aLL CASH SHORTFALLS ARE FUNDED WITH SHORT TERM DEBT. THE FIRM PAYS 2% OF ITS PRIOR QUARTERS ENDING LOAN BALANCE AS INTERST EACH QUARTER. THE MINIMUM CASH BALANCE IS $25. wHAT IS THE SHORT TERM LOAN BALANCE AT THE END OF THE YEAR? available anwsers are 107 111 121 128 133

Calculate the amount of additional cash that a company could raise from suppliers if its trade credit is extended by 10 days. Assume that the company’s trade payables are $300,000 and that it buys $2,300,000 from various suppliers yearly.

Melody Dairy has a line of credit with its bank. The firm plans to borrow $400,000 at a rate of 10 percent. The bank requires a 15% compensating balance and the firm currently maintains $20,000 in its account at the bank that can be used to meet the compensating balance requirement. Determine the annual finance cost to Melody of this loan.

Dome Metals has credit sales of $450,000 yeariy with credit terms of net 45 days, which is also the average collection perlod. a. Assume the fnrm offers a 2 percent discount for payment in 18 days and every customer takes advantage of the discount. Also assume the firm uses the cash generated from its reduced receivables to reduce its bank loans which cost 12 percent. What will the net gain or loss be to the firm if this discount is offered? (Use a 360-day year.)

Using manual formulas and not excel:

ABC Corporation receives checks from its customers. The total check value averages 700,000 each day. It takes an average of 5 days from deposits for these to clear the bank. If the bank offers to accelerate the 5-day clearing process to 3 days for a monthly fee of 600. If ABC can earn 4% investment income from excess cash, how much is the net annual benefits/cost of this bank offer?