Principles Of Finance-Short Term Finance

P-1.Scan cement company can buy raw materials of Tk 20,00,000 on terms 3/10, net 70. What would be costoftrade credit and effective interest rate. If company stretched the credit period by 10 days, what will be the cost of trade credit and effective interest rate P-2 Scan cement co., Ltd. need an additional capital bank loan could be taken of Tk 20,00,000 12 interest that will require 20 compensating balance. Find out EIR.If the company paid the interest in advance, what will be the EIR P-3 A commercial paper with face value of Tk 1,000 each sold at Tk.950 for 120 days Cost of issue ist 50 What will be the paperand effective interest rate. P-4 A company needs Tk.8,00,000 to meet working capital requirements immediately, it has thefollowing afternative sources (a) The company can buy Tk 10,00,000 at raw materials on terms of 3/30, net 90 (b) A bank will lend Tk 10,00,000 at 13 interest with 20 compensating balance requirementinterests are paid in advance. (c) issue commercial paper Tk 10,00,000 of six months period and net sales value is Tk.9,50,000 Required Which alternative should the company choose And why P-5 Rand 2 com Ltd, wants Tk.40 lakh as