FIN242 Titan Company requires RM400,000 to support the working capital requirement for 3 months: Corporate Finance Group Assignment, UiTM, Malaysia
|Universiti Teknologi MARA (UiTM)
|FIN242 Corporate Finance Assignment
Titan Company requires RM400,000 to support the working capital requirement for 3 months. The company is considering the below alternatives:
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.
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.
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.
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.
Recent Solved Questions
- Logistics has become an enormously important component of the gross domestic product (GDP) of industrialized nations: Managing System & Science Assignment, UBA, Malaysia
- MPU3113: Perlembagaan Malaysia mula berkuatkuasa pada tahun 1957 Ia berfungsi sebagai asas bagi semua undang-undang: Hubungan Etink Assignment, AeU, Malaysia
- As part of Rudiman Secondary school’s online `Safety Day 2022′ celebration, you a Pace officer, have been invited as a guest: Bullying at school Assignment, UKM, Malaysia
- If employees’ well-being and mental health are not in stable position they are also not able to focus on their tasks: Employee Mental Health Research Paper, MUM, Malaysia
- MGT555: Calculate the frequency distribution of customer demographics such as age, gender, race, education, and occupation: Business Analytics Assignment, UiTM, Malaysia
- Newcom is a newly established private limited company in Malaysia that supplies telecommunication services: Management Assignment, SU, Malaysia
- Describe windows system artifacts, Outline the key artifacts from the windows operating system: Cyber Forensics & Information Technology Assignment, LBS, Malaysia
- UGB363 linking significant news events to the share price increases and decreases: strategic corporate finance Assignment, UM, Malaysia
- FIN30014: Industrial commodities in China mostly rose as the number of Covid-19 cases fell and the government began to loosen the restrictions: Financial Risk Management Case Study, SUT, Malaysia
- BBMP1103 Bajoo Company produces three types of shirts every day. Their total production on certain days was 39 tons: mathematic for management Assignment, OUM, Malaysia