Answer: Sky's effective interest rate on this loan is 8.39%.
In this question, we assume that interest is compounded annually.
Since Sky issues a non-interest bearing note, Star Finance will deduct 7 months' interest at 8% on the Face Value of the loan and pay the rest as principal to Sky.
Face value of the note $16 million
Discount Rate p.a 8%
Tenure of the note 7 months
[tex]Loan Amount received by Sky = Face Value - Discount on note[/tex]
So, Sky pays an interest of 0.746666667 on a sum of 15.25333333 for 7 months. This works out to a seven month interest of:
From this we can work out the effective interest rate for Sky as follows:
Answer:
$14.50
Explanation:
Given;
Charge for first 2 hours = $5.00 and
$0.75 for each additional half hour or part thereof.
If he parks his car for 8 hours, then the first 2 hours will be charged at a rate of $5.00
Time left to charge is 6 hours. This will be charged at a rate of $0.75
Therefore cost to Sam for parking his car for 8 hours
= (2 × $5) + (6 × $0.75)
= $10 + $4.50
= $14.50
Sam paid $14.50 for parking.
In the vertical analysis of a balance sheet, net sales are assigned 100 percent, with all other items expressed as a percentage thereof.
When analyzing the balance sheet vertically, assets are divided by the base amount, total assets. Debt and equity are divided by the sum of debt and equity, which is the base amount.
Vertical analysis is a means of measuring the relationship between any two different financial statement amounts, while horizontal analysis examines the relationship between specific financial statement measures.
The next red flag relates to the balance sheet. Open receivables from customers that are difficult or impossible to identify and correct. Mass sales to companies of unknown identity or ownership.
Learn more about the balance sheet at
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Answer:
Value of firm today = $2,000,000
Explanation:
Provided details are,
Future Cash Flow = $100,000
Expected growth rate = 6.5%
Weighted average cost of capital = 11.5%
Firm's total corporate value = 
= 
= 
= $2,000,000
Thus, value of firm today with the details provided = $2,000,000
