Assignment
IBG-1000
Assignment Date: June 12, 2024
Due Date: June 17, 2024 23:59 pm
Please provide your responses to the following questions in the designated spaces below and then upload this file to Moodle.
Please provide the document in Word format only; PDFs are not accepted.
Student Name:
Student ID:
Q1: (10)
Compute the cost of not taking the following trade discounts: 3/10, net 180
Answer 1:
Q2: (20)
The average price on 182day Treasury bills was 98.097 with maturity value at 100. Calculate the Tbills annualized yield.
Answer 2:
Q3: (30)
The treasurer of Brandon Blue Sox is seeking a $20,000 loan for 180 days from the Brandon Credit Union. The stated interest rate is 10 percent and there is a 15 percent compensating balance requirement. The treasurer always keeps a minimum of $1,500 in the firms chequing account. These funds could count toward meeting any compensating balance requirements. What is the annual rate of interest on this loan?
Answer 3:
Q4: (40)
Towers Arcades currently borrows $560,000 per month from its bank on the strength of receivables, which average $800,000 per month. Credit terms are net 30. The banks interest rate is 10 percent annually, with an additional charge of .5 percent to process the accounts receivable used as security. The processing charge is based not on the loan amount but on the dollar value of the underlying receivables pledged as collateral. Towers has an offer from a factoring company to buy all of its receivables without recourse for a fee of 2 percent of the value of the receivables purchased. The factoring firm is prepared to lend Towers Arcades $560,000 per month at an interest rate of 11 percent. The factoring company would eliminate Towers credit department expense, including bad debts costs, of $15,000 a month. Should Towers Arcades switch to the factoring company?
Answer 4: