SHORT TERM FINANCING Flashcards
1
Q
USABLE FUNDS
A
INVOICE AMOUNT × (1 - DISCOUNT%)
2
Q
COST OF NOT TAKING DISCOUNT
A
[DISCOUNT% / (100% - DISCOUNT%)] × [DAYS IN YEAR / (TOTAL PAYMENT PERIOD - DISCOUNT PERIOD)]
3
Q
EFFECTIVE INTEREST RATE ON LOAN
EFFECTIVE INTEREST RATE
A
NET INTEREST EXPENSE / USABLE FUNDS
4
Q
EFFECTIVE INTEREST RATE ON A LOAN
EFFECTIVE RATE ON DISCOUNTED LOAN
A
STATED RATE / (1 - STATED RATE)
5
Q
DISCOUNTED LOANS
LOAN AMOUNT
A
USABLE FUNDS / (1 - STATED RATE)
6
Q
LOANS WITH COMPENSATING BALANCES
LOAN AMOUNT
A
USABLE FUNDS / (1 - COMPENSATING BALANCE%)
7
Q
LOANS WITH COMPENSATING BALANCES
EFFECTIVE RATE WITH COMPENSATING BALANCES
A
STATED RATE / (1 - COMPENSATING BALANCE%)
8
Q
LOANS WITH COMPENSATING BALANCES
EFFECTIVE RATE
A
STATED RATE / (1 - STATED RATE - COMPENSATING BALANCE%)
