3. 24.

Bill prices [LO 7.2] Dunolly Lollies requires approximately $1.5 million in short-term finance today for a period of 120 days and has arranged a 60-day bank bill facility with CanWest Bank. The bill has a

$1.5 million face value. Dunolly Lollies will roll over the bank bill into a second bank bill after 60 days. The current 60-day bank bill rate is 5.26 per cent per year and the 60-day bank bill rate in 60 days’ time is 5.31 per cent per year. What are the cash inflows for Dunolly today?

What are the cash inflows for Dunolly after 60 days? What are the cash outflows for Dunolly after 120 days?