AGL Ltd. has issued a bank-accepted bill to fund a short-term business project. The bill was issued for 180 days, with a face value of $1 800 000 and a yield of 9.87 per cent per annum.

PART A: Calculate the amount that AGL would raise to fund the project. [2 marks]

PART B: After 43 days, the bank bill is sold by the original discounter into the secondary market for $1 760 326.50. The purchaser holds the bill to maturity. Calculate the yield received by:

i. the original discounter of the bill. [2 marks]

ii. the holder of the bill at the date of maturity. [2 marks]

PART C (Not related to Parts (A) and (B): A company needs short-term financing pending collection of its accounts receivables but does not want to exceed its debt-to-equity ratio. In the context of accounts receivable finance, briefly explain factoring to the CFO of the company. [1 mark]