Short Term Financing Paper 7

1

Topka, Inc., needs to borrow $500,000 to meet its working capital requirements for next year. The Merchant Bank has offered the company a 9.5% simple interest loan that has a 16% compensating balance requirement. Determine the effective interest rate for the loan.






2

Buckeye Lawn Maintenance is a seasonal business and has decided to finance seasonal variations in current assets with short-term debt while financing the permanent component of current assets and all fixed assets with long-term debt or equity. Which one of the following best describes this type of financing?






3

Which one of the following is not a form of short-term credit?






4

A person invested Rs. 100000 in a bank FDR @ 6% p.a. for 1 year. If interest is compounded on half yearly basis, the amount payable shall be ......






5

Ranjit borrowed an amount of Rs. 50000 for 8 years @ 18% roi. What shall be monthly payment?






Result

Total Questions:
Correct Answers:
Wrong Answers:
Percentage: