Explore BrainMass
Share

Financial Management Problem Set

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

8. Compute the annual approximate interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations?
- 2/10 net 20
- 2/10 net 30
- 2/10 net 40
- 2/10 net 50
- 2/10 net 60

9. On January 2, 20X1, City Hospital established a line of credit with First Union National Bank. The terms of the line of credit called for a $200,000 maximum loan with an interest of 11 percent. Then compensating balance requirement is 15 percent of the total line of credit (with no additional fees charged).

10. What is the effective interest rate for City Hospital if 50 percent of the total amount were used during the year?

11. How would the answer to part of a change if the additional fees were $500?

12. How would the answer to part of a change if the additional fees were $1,000?

© BrainMass Inc. brainmass.com October 25, 2018, 7:44 am ad1c9bdddf
https://brainmass.com/economics/balance-of-payments/financial-management-problem-set-513624

Solution Preview

8. Compute the annual approximate interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations?

Approximate Interest rate = Discount %/(1-discount %)*365/(# of days until full payment is due - last day of discount)

- 2/10 net 20
Approximate Interest rate = 2%/(1-2%)*365/(20-10)=74.49%

- 2/10 net 30
Approximate Interest rate = 2%/(1-2%)*365/(30-10)=37.24%

- 2/10 net 40
Approximate Interest ...

Solution Summary

The solution discusses the step-by-step answers to the financial management problem sets.

$2.19
See Also This Related BrainMass Solution

Case Study on Capital One

Please read the attached case and answer to the following questions with in depth information.
I got some help on fist answering to the questions and I attached it as well. But it is too general and not specific from the case. Please make further answers and PLEASE GET ANSWERS ONLY FROM THE CASE ATTACHED.

1. Evaluate Fairbanks' approach to entrepreneurship in the credit card industry.

2. Identify Capital One's key functional strategies, company policies, and organizational structure and how they support/fail to support the company's overall strategy and objectives.

3. Write a one-sentence statement that summarizes Capital One's strategy.

4. Evaluate Capital One's strategy. Is is internally consistent? What are Capital One's key competitive advantages?

5. Was the company's strategy well-suited to the competitive environment that it faced? Why or why not?

6. Evaluate the America One and Summit Acceptance Corporation initiatives. Trying not to use hindsight, would you have supported either? Both? Why? Why not?

7. What strategic issues does Capital One face at the time of the case?

View Full Posting Details