Q1. One of the stores finances his needs from a commodity through trade credit, and the terms of dealings between the store and the supplier were 1/10, net of 40 days. The store's monthly purchases from this resource amounted to 100,000 riyals, and the store wants to know the annual financing cost if it takes advantage of the payment deadline and makes the payment at the end of the period. Required: Determine the annual financing cost in accordance with these conditions, so that the store can take the appropriate financial decision?

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Q2. Suppose that a certain facility has concluded an agreement with a commercial bank to borrow an amount of 20,000 riyals for a year with interest of 1,500 pounds, and according to this agreement the nominal interest rate is 7.5%.

Required: What is the effective interest rate in the event of maintaining an offset balance of 3000 riyals? The solution:

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Q3.Assuming that the asset turnover rate of an industrial company was in the year 2005 an amount of 2 times per year, and that the return on total assets is estimated at 6%, what is the net profitability of the company? If you know that in the following year 2006, the asset turnover rate is 1.5 times, and the net profitability is 5%. What is required: What is the rate of return on investment in (2005) and (2006), and which of the two positions is more profitable? The solution:

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Q4. If the profit is profit before taxes, then the foreign companies represent the amount of 100,000 pounds, and the interest is 10,000 pounds - and if you know that the financing banks were about 90,000 pounds. Required: - Specify the number of times interest coverage, as well as the percentage of fixed expenses coverage? The solution: