BMI Ltd. had arranged with the bank for a 6 month line of credit of $200,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
BMI Ltd. had arranged with the bank for a 6 month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges 0.5% commitment fee on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months. Calculate the total cost of financing for the Line of Credit below: a. On the BMI Line of Credit: what is the total interest charged: $ b. On the BMI Line of Credit: what is the total commitment fee charged: $ BMI Ltd. had arranged with the bank for a 6 month line of credit of $200,000 at prime plus 2%. Prime rate is 4%. The bank charges 0.5% commitment fee on any unused balance. BMI Ltd. ended up using only $160,000 for 4 months. Calculate the total cost of financing for the Line of Credit below: a. On the BMI Line of Credit: what is the total interest charged: $ b. On the BMI Line of Credit: what is the total commitment fee charged: $
Expert Answer:
Answer rating: 100% (QA)
a On the BMI Line of Credit Total Interest Charged Line of ... View the full answer
Related Book For
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
Posted Date:
Students also viewed these accounting questions
-
Mary signed up and paid $1,380 for a 6 month ceramics course on June 1st with Choplet Ceramics. As of August 1st, Choplets accounting records would indicate: a $460 of revenue, $920 of accounts...
-
On Joeys credit card, interest is charged at a rate of 19.99% per annum. December 1 Joey withdrew $300 as a cash advance from his credit card. December 31 Received the credit card statement, showing...
-
The Canada Student Loans Program charges interest at prime plus an added percentage, such as 2.5%, on its loans to students. Is this a fixed or floating rate? Explain.
-
Classify the following as microeconomics or macroeconomics and provide a justification for your choice. (i) The effect of changes in household saving rates on the growth rate of national income. (ii)...
-
Consider the following balance sheets (in millions): Cloud Software paid $300 million to Tron stockholders for all their stock. The fair value of the plant assets of Tron is $150 million. The fair...
-
Project: Work Plan to Support Team Performance Develop a work plan for your workplace (or a workplace that you are familiar with), and write a brief report on the other activities conducted in the...
-
Explain why goal trees are so useful to artificial intelligence research. Give illustrations of how they are used.
-
A company reports the following sales related information: Sales (gross) of $200,000; Sales discounts of $4,000; Sales returns and allowances of $16,000; Sales salaries expense of $10,000. Prepare...
-
Let A 1 2 25 3 7. Find A-1 -3 -6 -10]
-
Clinicians at a nursing home facility want to see if giving residents a plant to tend to will help lower depression. To test this idea, the residents are randomly assigned to one of three groups:...
-
1. Ayn Rands Objectivist philosophy has been touted by her detractors as the philosophy of self-interested selfishness. Her four epistemological principles are: 1. Metaphysics: Objective reality of...
-
Consider the following diagram of the \(A E\) function and the \(45^{\circ}\) line. a. Suppose the level of actual national income is \(Y_{1}\). What is the level of desired aggregate expenditure? Is...
-
This question relates to desired saving, and is based on the table in Question 3 . a. Compute desired saving at each level of disposable income. Plot the saving function on a scale diagram. What is...
-
Consider the following data for a hypothetical economy that produces two goods, milk and honey. a. Compute nominal GDP for each year in this economy. b. Using year 1 as the base year, compute real...
-
For each of the following events, describe the likely effect on real GDP in Canada. a. A major ice storm in Quebec damages homes and thus increases the demand for building materials. b. A flood on...
-
The following diagrams show the \(A D\) and \(A S\) curves in two different economies. a. Explain what aspect of firms' behaviour might give rise to the horizontal \(A S\) curve in Economy \(A\). b....
-
A list of all purchases made at a particular outlet (for example, 'Egham Main Street'), ordered by time, giving for each the time, the number of different product types purchased, and the total price...
-
Bonus shares can be issued out of revenue reserves. True/False?
-
The post-closing trial balance of Jajoo Corporation at December 31, 2014, contains the following shareholders' equity accounts: $5 noncumulative preferred shares (10,000...
-
Franklin Corporation had 20,000 common shares on January 1, 2014. On March 1, 5,000 shares were repurchased. On June 1 and September 30, 6,000 and 10,000 shares were issued, respectively. Calculate...
-
Olivier Corporation reported the following pre-tax amounts for the year ended August 31, 2014: profit before income tax (on the company's continuing operations), $320,000; loss from operations of...
-
Explain the working of following drilling machines with a neat diagram: (a) General purpose drilling machine. (b) Pillar drilling machine. (c) Bench drilling machine. (d) Redial drilling machine.
-
How do you specify a drilling machine?
-
Describe the construction and working of the following : (a) General purpose milling machine. (b) Vertical milling machine.
Study smarter with the SolutionInn App