The Ohio Valley Steel Corporation has borrowed $5.1 million for one month at a stated annual rate
Question:
The Ohio Valley Steel Corporation has borrowed $5.1 million for one month at a stated annual rate of 8.7%, using inventory stored in a field warehouse as collateral.
The warehouser charges a $5100 fee, payable at the end of the month. What is the effective annual rate of this loan?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (1 review)
To calculate the effective annual rate of this loan we need to consider both the interest rate and t...View the full answer
Answered By
Ajeet Singh
Hi there! Are you looking for a committed, reliable, and enthusiastic tutor? Well, teaching and learning are more of a second nature to me, having been raised by parents who are both teachers. I have done plenty of studying and lots of learning on many exciting and challenging topics. All these experiences have influenced my decision to take on the teaching role in various capacities. As a tutor, I am looking forward to getting to understand your needs and helping you achieve your academic goals. I'm highly flexible and contactable. I am available to work on short notice since I only prefer to work with very small and select groups of students. Areas of interest: Business, accounting, Project management, sociology, technology, computers, English, linguistics, media, philosophy, political science, statistics, data science, Excel, psychology, art, history, health education, gender studies, cultural studies, ethics, religion. I am also decent with math(s) & Programming. If you have a project you think I can take on, please feel welcome to invite me, and I'm going to check it out!
5.00+
4+ Reviews
24+ Question Solved
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Question Posted:
Students also viewed these Business questions
-
The Ontario Steel Corporation has borrowed $5 million for one month at a stated annual rate of 9%, using inventory stored in a field warehouse as collateral. The warehouser charges a $5000 fee,...
-
The Ohio Valley Steel Corporation has borrowed $5 million for one month at a stated annual rate of 9%, using inventory stored in a field warehouse as collateral. The warehouser charges a $5000 fee,...
-
You run a Michelin starred restaurant in Cumbria. During the lockdown period of the Covid-19 pandemic the restaurant spent several months without being able to serve drinks or food to patrons and...
-
Jarvis Company produces a product that has a selling price of $20.00 and a variable cost of $15.00 per unit. The company's fixed costs are $50,000. What is the break-even point measured in sales...
-
In Exercises 1-2, determine the x-intercept(s) of the graph visually. Then find the x-intercept(s) algebraically to confirm your results. 1. y = x2 2x - 3 2. y = x2 4x - 5 3. y = 2x2 + 5x 3 4. y =...
-
Using net present value, a project is rejected if it is a. equal to zero. b. positive. c. negative. d. less than the hurdle rate. e. greater than the cost of capital.
-
Why is the application of this theory more advantageous for companies in difficulty?
-
Branson Industries conducts operations in five major industries, A, B, C, D, and E. Financial data relevant to each industry for the year ending December 31, 2019, are as follows: Included in the...
-
Bernie is a former executive who is retired. This year Bernie received $185,000 in pension payments and $17,700 of Social Security payments. What amount must Bernie Include in his gross income?...
-
The Rasputin Brewery is considering using a public warehouse loan as part of its short-term financing. The firm will require a loan of $550,000. Interest on the loan will be 9.6% (APR, annual...
-
The Signet Corporation has issued four-month commercial paper with a $6.4 million face value. The firm netted $6,248,982 on the sale. What effective annual rate is Signet paying for these funds?
-
Presented below are two sets of financial ratios. The ratios in the first column were computed from EAZ Manufacturing's prior-year audited statements. In the second column are ratios computed from...
-
1) Westpac Banking Corporation has a 3-year bond outstanding that pays a 7.25 per cent coupon and is currently priced at $913.88. What is the yield to maturity of this bond? Assume annual coupon...
-
At December 31, 2017 and 2018, Vaughn Manufacturing had outstanding 4100 shares of $100 par value 6% cumulative preferred stock and 19300 shares of $10 par value common stock. At December 31, 2017,...
-
Dynamic Industrial is a relatively young company, with an unsophisticated accounting system. Dynamic Industrial manufactures two products, X370A, and Z410B. Each of the products has multiple...
-
Take on the role of a Deaf parent of a Deaf child who is a friend of the hearing parent. State whether or not you agree with my decision about getting a cochlear implant. (My response is below) If...
-
A successful franchise owner of a prestigious sporting goods chain is feeling the effects of technology, with more and more online sales and fewer and fewer customers in the shops. Locally there are...
-
Obtain the most recent audited annual financial report of the U.S. government. It is available from the Government Accountability Office (GAO). Required a. Did the GAO give the federal government an...
-
The following information is available for Partin Company: Sales $598,000 Sales Returns and Allowances 20,000 Cost of Goods Sold 398,000 Selling Expense 69,000 Administrative Expense 25,000 Interest...
-
What discount rate should be used for the incremental lease cash flows to compare a true tax lease to borrowing?
-
Suppose Clorox can lease a new computer data processing system for $975,000 per year for five years. Alternatively, it can purchase the system for $4.25 million. Assume Clorox has a borrowing cost of...
-
Suppose Netflix is considering the purchase of special software to facilitate its move into video-on-demand services. In total, the firm will purchase $48 million in new software. This software will...
-
Pregunta 51 pts Aldo es un joven profesor del rea de Matemticas que, actualmente, trabaja en un colegio de la capital de Honduras. En una de sus clases, comparti con sus estudiantes que el valor del...
-
Bristol Syrup Company Ltd (BSC) makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and for use in desserts. The bottles...
-
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his divisions return on investment (ROI), which has been above 23% each of the last three...
Study smarter with the SolutionInn App