Ask Question, Ask an Expert


Ask Basic Finance Expert

Boles Corporation needs to raise $500,000 for one year to supply capital to a new store. Boles buys from its suppliers on terms of 3/10, net 90, and it currently pays on Day 10 and takes discounts, but it could forgo discounts, pay on Day 90, and get the needed $500,000 in the form of costly trade credit. Alternatively, Boles could borrow from its bank on 12 percent discount interest basis. What is the EAR of the lower cost source?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939170

Have any Question? 

Related Questions in Basic Finance

Response of firms to a stimulative monetary policyin a weak

Response of Firms to a Stimulative Monetary Policy : In a weak economy, the Fed commonly implements a stimulative monetary policy to lower interest rates, and presumes that firms will be more willing to borrow. Even if b ...

Consider two risky stocks their variances are different

Consider two risky stocks (their variances are different from zero), which are perfectly negatively correlated, i.e., their correlation is equal to -1. Is it possible to combine these two stocks and form a zero-risk port ...

Pretty lady cosmetic products has an average production

Pretty Lady Cosmetic Products has an average production process time of forty days. Finished goods are kept on hand for an average of fifteen days before they are sold. Accounts receivable are outstanding an average of t ...

Question 1 the common stock of detroit engines has a beta

QUESTION 1: The common stock of Detroit Engines has a beta of 1.17 and expected returns of 14.64 percent. The risk-free rate is 4.5 percent. What is the expected return on the market? Hint: Use the CAPM equation to get t ...

The united states purchased alaska in 1867 for 72m where

The United States purchased Alaska in 1867 for $7.2M (where Mstands for million). Assume that federal tax revenue from the state of Alaska (net federal expenditures) is $55.1M in 2012 and that tax revenue started in 1868 ...

What is buying on the margindoes it increase or decrease

What is buying on the margin? Does it increase or decrease the risk of large losses? What about gains?

Using the maximum ratios for a conventional mortgage how

Using the maximum ratios for a conventional mortgage, how big a monthly payment could the clinton family afford if their gross (before tax) monthly income amounted to $3,500? would it make any difference if they were alr ...

Review the areas of gain and loss to different groups in

Review the areas of gain and loss to different groups in given Figure. Why do the migrants gain only areas e and f ? Why don't they each gain the full southern wage markup ($3.20 - $2.00)? Why don't they each gain ($5.00 ...

Time value of money and financial markets and

Time Value of Money and Financial Markets and Institutions Create a 1,050-word report, and include the following: • Describe the role of the financial institutions and financial markets in our economy • Differentiate bet ...

1 briefly explain how shareholders returns are taxed twice

1. Briefly explain how shareholders' returns are taxed twice in the United States with tax laws that favor capital gains. 2. Rightists argue that increasing a firm's dividend will increase its value. Review some of the k ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate