amount to be received (or paid) by the counterparty on this interest rate swap each year based on the forecasts of LIBOR assumed above. ANSWER: Year 1 = $0; Year 2 = $1‚000‚000 paid; Year 3 = $1‚500‚000 paid 2. Interest Rate Caps. Northbrook Bank purchases a four-year cap for a fee of 3 percent of notional principal valued at $100 million‚ with an interest rate ceiling of 9 percent‚ and LIBOR as the index representing the market interest rate. Assume that LIBOR is expected to be 8 percent‚ 10
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year. The firm net fixed assets of $161‚900. What is the amount of the net working capital? 3. Kaylor Equipment Rental paid $75 in dividends and $511 in interest expense. The addition to retained earnings is $418 and net new equity is $500. The tax rate is 35 percent. Sales are $15‚900 and depreciation is $680. What are the earnings before interest and taxes? 4. The Widget Co. purchased new machinery three years ago for $4 million. The machinery can be sold to the Roman Co. today for $2 million.
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COAST4LIFE INC Memorandum To :Coast4life Inc From: Pat Brown‚ CMA Subject: Options for Cost savings and revenue generation Introduction: Coast4life Inc with the expected downturn situation due to recent terrorist attack on a cruise ship in 2012 and on airline industry would prepare to remain profitable by finding ways to cut cost or generate additional revenue. Target is to recommend the best among the four alternative as directed and aiming at 16% after tax return and tax
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Treasury Risk Management CURRENCY AND INTEREST RATE SWAP _A CASE STUDY OF THE AUSTRALIAN FOREIGN EXCHANGE MARKET_ ABSTRACT Business transactions occur on the international front and there are laws and regulations regarding the pricing of the long-term forward exchange contracts. It is noted that the violation of the traditionally covered interest arbitrage pricing relation has been rampant and that the activity in the international currency and interest rate swap markets offers a substantial
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17 15.29 Interest Rate Options vs. FRAs 15.30 Interest Rate Caps and Floors 15.31 Minimum and Maximum Values for Options 15.32 Straddles and Strangles 15.33 Option Prices and the Time to Expiration Derivatives - Interest Rate Caps and Floors Interest Rate Cap An interest rate cap is actually a series of European interest call options (called caplets)‚ with a particular interest rate‚ each of which expire on the date the floating loan rate will be reset. At each interest payment date
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this assessment‚ the audience will be going through the collective impact that Interest groups and lobbyists have in today’s lawmaking. If‚ and how the government should apply tougher restrictions‚ limitations and oversight on interest groups‚ who have access to greater funds‚ in an ability to allow all of our voices to count equally and account for the same amount of influence. The most basic definition of an interest group is the collection of individuals organized to influence public policy‚ primarily
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amortization Definitions (2) 1. The gradual elimination of a liability‚ such as a mortgage‚ in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest. 2. Writing off an intangible asset investment over the projected life of the assets. Read more: http://www.investorwords.com/200/amortization.html#ixzz2GXWACfP2 Applications of amortization In business‚ amortization refers to spreading payments over multiple periods. The
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that time period‚ you’ll have to pay interest – a percentage of the money you owe the bank – on top of what you borrowed. When you’re deciding which credit card to get‚ ask yourself one question: will I need to pay interest on my debts? If you pay back everything you spent on time‚ you can get a credit card with rewards. These cards give you points‚ cash or airline miles every time you use them. However‚ if you do use a rewards card‚ you’ll have a very high interest rate. Which brings us to what to do
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Fax Cover Sheet Use this cover sheet when faxing documents back to your loan officer. Faxes that do not contain this cover sheet will not be processed or received by the intended recipient. Fax # 800-704-0852 TO: Gianni Joseph Cerretani 800-704-0852 3011129634 elizabeth.mansfield@angeloakfunding. FROM: Latasha Miles 2432 Braelin Loop Mcdonough‚ GA 30253 {cda1f9e0-e0e1-466b-95e8-ed3f90613b4c} Latasha Miles 77777777070707000772707022451331007262034232027311071203263245735540764615152674403007
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$450‚000 Short-term interest expense = 5% [$450‚000 + ½ ($350‚000)] = 5% ($625‚000) = $31‚250 Long-term interest expense = 10% [$600‚000 + ½ ($350‚000)] = 10% ($775‚000) = $77‚500 Total interest expense = $31‚250 + $77‚500 = $108‚750 Earnings before interest and taxes $200‚000 Interest expense 108‚750 Earnings before taxes $ 91‚250 Taxes (30%) 27‚375 Earnings after taxes $ 63‚875 b. Alternative financing plan Short-term interest expense = 5% [½ ($450
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