Assignment
1. CommunityHospital has annual net revenues of $ 150 million for patient care. Currently the payments received by the hospital are not deposited before the first six days after billing service. The hospital is exploring a deal to reduce the six days to one day and improve cash flow. If these funds released by the availability of cash could invest at a rate of 8% per annual, much would the annual savings? Suppose the bank fee is $ 2,000 per month.
2. St. Luke's ConvalescentCenter has a surplus of funds for $ 200,000 to be invested in marketable securities. If the transaction costs of buying therefore, for sale of the securities is $ 2,200 and the investment of these funds will be held for three months, annual minimum performance must be obtained for the investment makes economic sense?
3. Your company is considering a bank loan for $ 1,000,000, under the following three alternatives: Assume that you normally do not lead to any bank account balance of 20% that meets this requirement of compensation. What is the annual interest rate of each loan?
a) 10% percent of the loan is paid at the end of the year without compensating balance
b) loans of 9% paid at year-end with a balance of compensation of 20%
c) 6% of the loan is discounted with a requirement of 20% as compensation balance Assume that you normally do not lead to any bank account balance of 20% that meets this requirement of compensation. What is the annual interest rate of each loan?
4. Trade credit is a temporary source of important resources that are not translated into a truly effective input, but delayed his departure. Sellers often offer discounts for early payment. What is the formula for determining the effective interest rate if the discount is not used?