How can a firm in need of short-term financing decide whether or not to take a cash discount offered by its supplier? How would this decision change in the event the firm has no alternative source of short-term financing? How would it change for a firm that needs no additional short-term financing?
Answer to relevant QuestionsBriefly describe each of the following disbursement products/methods: • Zero-balance accounts (ZBAs) • Controlled disbursement • Positive pay How does a ZBA relate to the firm’s target cash balance? How are the rates on short-term borrowing typically set? What role does either the prime rate or LIBOR play in this process? What is the effective borrowing rate (EBR)? How does the EBR differ from the stated all-in rate? Assume a firm receives the following credit terms from six suppliers and a 365-day year. Supplier 1: 2/10 net 50 Supplier 2: 1/10 net 30 Supplier 3: 2/10 net 150 Supplier 4: 3/10 net 60 Supplier 5: 1/10 net 45 Supplier 6: ...Who are the major players in foreign currency markets, and what are their motivations for trading? Recently a financial newspaper reported the following spot and forward rates for the Japanese yen (¥) Spot: .......... $0.007556/¥ (¥132.34/$) 1-month: ....... $0.007568/¥ (¥132.14/$) 3-month: ....... $0.007593/¥ ...
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