Model Test
Sub: Finance
A A factor will buy the company accounts receivable of tk 12 00 000 per month and annual credit sales is 144 00 000, an average collection period of 30 days. The factor will advance up to 85% of the face value of the receivable at 12% interest. The factor also charges 2% commission all receivable purchase. It has been estimated that he factor service will save tk 25000 per month consisting additional and bad debt loss. Find out the will get as advance and EIR.
Aria chemicals limited is considering rising of tk 15 00 000 by issuing commercial paper for 120 days. Commercial paper will be sold at 8% discount. Stump duty charge will be 0.50% and rating charge 0.30% and issuing and other cost 18000. Calculate the cost of commercial paper and EIR.
B Rexona LTD has got tk 80 00 000 revolving credit agreement with standard bank at 12% interest and 2% commitment fee on the unused proportion of credit. If the company utilized on average 80% of the total commitment, you are required to calculate:-
1. What is the expected annual cost of this credit?
2. EIR
3. What is EIR if the company utilized only tk 32 00 000 as a loan of total commitment?
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