Question
In: Finance
15. Total Ghana has a temporary need for funds. Management is trying to decide between taking...
15. Total Ghana has a temporary need for funds.
Management is trying to decide between taking discounts from one of
their suppliers or a 14.75% per annum renewable discount loan from
its bank for 3 months. The suppliers' terms are as follows. GNPC
1/10, net 30. BOST 2/15, net 60. Tema Oil Refinery net 90. Assume
360-day year, the cheapest source of short-term financing is
*
(a) The bank
(b) GNPC
(c) BOST
(d) Tema Oil refinery
Solutions
Expert Solution
Based on the given data, pls find below workings;
It is evident from the discount norms that Tema Oil norms is the cheapest, as the discount norms are "Net 90"; It means that till 90 days the credit period is available and at 90 days, the entire amount MUST be paid back; Since the requirement is for short term financing for 3 months, the Tema Oil is the cheapest source of financing.
Also, pls find below the workings for all the options:
jeff jeffy answered 1 year agoRelated Solutions
You are trying to decide between taking the bus to work or buying a car and...
You are trying to decide between taking the bus to work or
buying a car and driving. Assume that a bus pass costs $100/month
but that when you use the bus you also need to take a taxi to/from
the bus stop at an additional cost of $120/month. You can buy a
good used car for $5000. It will last for 5 years and be worthless
at the end of that time. In addition, gas and parking cost
$125/month. Your...
Question 6 15 Marks PG has R100,000 to invest. The company is trying to decide between...
Question 6 15 Marks
PG has R100,000 to invest. The company is trying to decide
between two alternative use of funds. The alternatives are:
Project A Project B
Cost of equipment required R100,000 R0
Working capital investment required R0 R100,000
Annual cash inflow R21,000 R16,000
Salvage value of equipment in six years R8,000 R0
Life of the project 6 years 6 years
The working capital needed for project B will be released at the
end of six years for investment...
The management of Ethan plc is trying to decide on a cost of capital to apply...
The management of Ethan plc is trying to decide on a
cost of capital to apply to the evaluation of investment projects.
The company has an issued share capital of 500,000 ordinary K1
shares, with a current market value cum-div of K1.17 per share. It
has also issued K200,000 of 10% debentures, which are redeemable at
par in five years’ time and have a current market value of K105.30
cum-interest, and K100,000 of K1 irredeemable 6% preference shares,
currently priced...
The management of Ethan plc is trying to decide on a cost of capital to apply...
The management of Ethan plc is trying to decide on a
cost of capital to apply to the evaluation of investment projects.
The company has an issued share capital of 500,000 ordinary K1
shares, with a current market value cum-div of K1.17 per share. It
has also issued K200,000 of 10% debentures, which are redeemable at
par in five years’ time and have a current market value of K105.30
cum-interest, and K100,000 of K1 irredeemable 6% preference shares,
currently priced...
2 The management of Ethan plc is trying to decide on a cost of capital to...
2 The management of Ethan plc is trying to decide on a cost of
capital to apply to the evaluation of investment projects. The
company has an issued share 'capital of 500,000 ordinary $l shares,
with a current market value cum-div of $l.17 per share. It has also
issued $200,000 of 10 debentures, which are redeemable at par in
five years' time and have a current market value of$105.30
cum-interest, and $lOO,OOO of $l irredeemable 6 preference shares,
currently priced...
You are trying to decide between two investments. The first investment has a 90% chance to...
You are trying to decide between two investments. The first
investment has a 90% chance to make you $2,000, but the alternative
is that you could be losing $5,000. The second investment has a 15%
chance to make you $25,000, but the alternative is that you could
be losing $5,000. Use expected value to help decide which
investment is the mathematically smart choice. (Hint: make two
separate expected values and compare).
a) Indigo Inc. has $581,180 to invest. The company is trying to decide between two alternative...
a) Indigo Inc. has $581,180 to invest. The company is trying to
decide between two alternative uses of the funds. One alternative
provides $77,120 at the end of each year for 12 years, and the
other is to receive a single lump-sum payment of $1,823,990 at the
end of the 12 years. Which alternative should Indigo select? Assume
the interest rate is constant over the entire investment.
b) Indigo Inc. has completed the purchase of new Dell computers.
The fair...
1. Stan has 4 teenage daughters all in need cars. He is trying to decide how...
1. Stan has 4 teenage daughters all in need cars. He is trying
to decide how many Honda Civics (H) and/or a Toyota Camrys (T) to
purchase for them. He has the following utility function over the
cars:
U(H, T)=0.5H+T
The price of a Honda is $20,000 and the price of a Toyota is
$24,000. If we graph the Honda Civic on the horizontal axis and
Toyota Camry on the vertical axis what does the consumer’s income
offer curve look...
The management of VITULLO Company is trying to decide whether to continue manufacturing a part or...
The management of VITULLO Company is trying to decide whether to
continue manufacturing a part or to buy it from an outside
supplier. The part, called FIZBE, is a component of the company’s
finished product.
The
following information was collected from the accounting records and
production data for the year ending December 31, 2017.
5,000 units of FIZBE were produced in the machining
department.
Variable manufacturing costs applicable to the production each
FIZBE unit were: direct materials $4.75, direct labor...
What factors should be considered by top management if Walmart was trying to decide if they...
What factors should be considered by top management if Walmart was
trying to decide if they should drop their automotive services from
every Super Walmart?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Develop a Java program that determines the gross pay for an employee. The company pays hourly...
- Discuss the four evolving company orientations. Which orientation is considered most successful and why?
- Flexible Budgeting and Variance Analysis I Love My Chocolate Company makes dark chocolate and light chocolate....
- this should be written in Java- Problem: Min/Max Search by Index Develop a program that, given...
- 2.the stock of Business Adventures sells for $70 a share. Its likely dividend payout and end-of-year...
- Provide TWO specific strategies that an equipment designer could employ to reduce heating of the temperature-sensitive...
- For fatty acid synthesis what would be the substrate if you are making an even number...
ADVERTISEMENT