(Related to Checkpoint 18.2) (Estimating the cost of bank credit) Paymaster Enterprises has arranged to finance its seasonal
working-capital needs with a short-term bank loan. The loan will carry a rate of 13 percent per annum with interest paid in advance (discounted). In addition, Paymaster must maintain a minimum demand deposit with the bank of 10 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow $90 comma 000 for a period of 2 months, what is the annualized cost of the bank loan?
1 answer:
Answer:
answer for the question:
(Related to Checkpoint 18.2) (Estimating the cost of bank credit) Paymaster Enterprises has arranged to finance its seasonal working-capital needs with a short-term bank loan. The loan will carry a rate of 13 percent per annum with interest paid in advance (discounted). In addition, Paymaster must maintain a minimum demand deposit with the bank of 10 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow $90 comma 000 for a period of 2 months, what is the annualized cost of the bank loan?
is given in the attachment.
Explanation:
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Answer:
E. 115 boxes.
Explanation:
d: 10 boxes/day
p: 36 boxes/day
n: 365 days
s: $60
H: $24 box/year
D: d*n
D= 10*365= 3650 boxes/year
EPQ =
EPQ=
EPQ= 158.96 = 159 units
I=Q/P * (p-d)
I=159/36 * (36-10)
I=114.83
115 boxes aproximately