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REQUIRED: Q.2.1 Calculate the difference in the effective annual rates of interest offered by both banks if the company borrows the funds from Bucks Bank

REQUIRED:

Q.2.1

Calculate the difference in the effective annual rates of interest offered by both banks if the company borrows the funds from Bucks Bank over three months and Wealth Bank over eight months.

Round off all calculations to two (2) decimal places (18)

Q.2.2

The financial manager of Philander Limited is also considering making use of accruals in financing it's business. Discuss under what circumstances the company would be justified in making use of them.

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