FIN242 Titan Company requires RM400,000 to support the working capital requirement for 3 months: Corporate Finance Group Assignment, UiTM, Malaysia

University Universiti Teknologi MARA (UiTM)
Subject FIN242 Corporate Finance Assignment

Question 5
Titan Company requires RM400,000 to support the working capital requirement for 3 months. The company is considering the below alternatives:

Alternative 1
Apply for a loan from CDG Bank that pays an annual interest rate of 7.5 percent on a discounted basis. The bank requires a 12 percent compensating balance. Titan maintains a demand deposit of RM40,000 in the bank.

Alternative 2
Titan has a revolving credit agreement with CDG Bank for the total amount of RM450,000. An interest rate at 8 percent is charged on the used loan. A commitment fee of 5 percent is charged on the unused loan. On top of that, the bank requires that Titan maintain a checking account of RM15,000.

Alternative 3
Issue commercial paper on a discounted basis at an interest rate of 10 percent per annum.
Dealer placement fee is RM3, 000 per paper and the par value of these commercial papers are RM40, 000 each.

Alternative 4
Foregoing a trade credit with favourable term of 5/15 net 50.
i. Compute the effective interest rates of the above financing alternatives.
ii. Determine the best financing alternative should the company choose. Why?

Get Solution of this Assessment. Hire Experts to solve this assignment for you Before Deadline.

Get Help By Expert

Starting afresh in your Corporate Finance endeavors at Universiti Teknologi MARA (UiTM), Malaysia? Fantastic! Delve into our online assignment services tailored for Research Paper Help and assistance with Group Assignments. Specifically addressing Titan Company's requirement for RM400,000 to bolster a 3-month working capital need in your Corporate Finance Group Assignment at UiTM, our expert team stands ready to support you.Malaysian students can elevate their UiTM experience by leveraging our specialized guidance, ensuring proficiency in handling financial intricacies within the coursework.

Answer

Recent Solved Questions

Online Exam & Assignment Writing Services

11770+ Orders Delivered

4.9/5
5 Star Rating

Confidential & Secure Assignment Help For

Group Assignment Help

Online Exam -Test & Quiz

Cheapest Price Quote

Diploma & Certificate Levels

Semester & FYP Papers

Summative & Individual

GBA & Reflective

Last Minute Assistance

Sample Assignment Download

CSC577 Software Engineering: Theories And Principles Assignment Example Malaysia
This assignment CSC577 will introduce you to the theories and practices of Software Engineering, including software processes, requirement analysis design programming practices verification/validation. It also constructs a solid foundation for…
Computer & It
BCT493 Construction Safety And Health UITM Assignment Sample Malaysia
The BCT493 Construction Safety and Health course is an advanced-level course that focuses on key principles of workplace safety related to the field of construction. The content covers all manner…
Assignment Sample

UP TO 15 % DISCOUNT

Instant Paper Writing Services by Native Malaysia Writers

Plagiarism Free Solutions
100% Original Work
24*7 Online Assistance
Native PhD Experts
Hire a Writer Now

Get Assistance for Assignments, online Exam, and Projects Writing