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Marrrta [24]
2 years ago
8

Grecian Tile Manufacturing of Athens, Georgia, borrows $1,500,000 at LIBOR plus a lending margin of 1.25 percent per annum on a

six-month rollover basis from a London bank. If six-month LIBOR is 4.5 percent over the first six-month interval and 5.375 percent over the second six-month interval, how much will Grecian Tile pay in interest over the first year of its Eurodollar loan
Business
1 answer:
shtirl [24]2 years ago
8 0

Answer: 92812.50

Explanation:

The following information can be derived from the question:

Loan principal = $1,500,000

LIBOR for 1st 6 months = 4.50%

LIBOR for last 6 months = 5.375%

Lending margin per annum = 1.25%

The interest will then be:

= 1,500,000 × [(4.50% + 1.25%)/2] + 1,500,000 × [(5.375% + 1.25%)/2]

= 1,500,000 × [(0.045 + 0.0125)/2] + 1,500,000 × [(0.05375 + 0.0125)/2]

= 92,812.50

Therefore, the interest is 92812.50.

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The value of money decreases rapidly
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Trumbull Company budgeted sales on account of $120,000 for July, $211,000 for August, and $198,000 for September. Collection exp
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Answer:

Total cash receipts              194,760

Explanation:

We will calculate base on the budget number provided.

We will multiply the month sales revenue by the amount expected to be colelcted on september

The receipts from account receivable on september:

<u>60% of previous month:</u>

60% of August: 198,000  =  118,800

<u>36% from the second month:</u>

36% of July: 211,000        = <u>  75,960  </u>

Total cash receipts              194,760

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Bubble-Up, Inc., is a small manufacturer of educational toys for children under age 10. It has co-existed with three other compe
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2 years ago
Comfort Cords produces curtain cords. In the process of manufacturing those cords, it also produces hair ties which are sold sep
hoa [83]

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$609,000

Explanation:

The revenue in June for  Comfort Cords is the sum of the revenue from cords and hair ties.

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3 0
3 years ago
The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $95 per share for months, and you believe
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Answer:

The price of 3 months call option on stock is 8.03.

Explanation:

Acording to the details we have the following:

P = Price of 3-months put option is $6

So = Current price is $95

X = Exrecise price is $95

r = Risk free interest rate is 9%

T = Time is 3 months=1/4

C=Price of call option?

Hence, to calculate what must be the price of a 3-month call option on C.A.L.L. stock at an exercise price of $95 if it is at the money, we have to use the formula from put-call parity.

C=P+So-<u>     X    </u>

                (1+r)∧T

C=$6+$95-  ( <u>$95      )</u>

                     (1+0.09)∧1/4

C=$6+$95-$92.97

C=8.03

The price of 3 months call option on stock is 8.03

5 0
3 years ago
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