Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has $100,000,000 of excess cash and on June 7, 2023,
You are the Chief Financial Officer (CFO) for a Toronto-based Biotech company. Your company has $100,000,000 of excess cash and on June 7, 2023, you notice that the Bank of Canada Canadian Overnight Repo Rate Average (CORRA) is 4.50% (this is an annualized overnight rate). If you consider depositing your company's excess cash ($100,000,000) for 30 consecutive days in the Overnight Repo Rate, calculate the after-tax interest income assuming that the tax rate on interest income is 40%. Also, assume that there is no transaction cost. (Do not use the $sign. If your answer is $123,456.78, enter 123456.78)
Step by Step Solution
★★★★★
3.47 Rating (154 Votes )
There are 3 Steps involved in it
Step: 1
To calculate the aftertax interest income we need to determine the interest ea...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started