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FIN3702 Assignment 2 (COMPLETE ANSWERS) Semester 1 2024 - DUE April 2024 ;100% TRUSTED workings, explanations and solutions. $2.99
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FIN3702 Assignment 2 (COMPLETE ANSWERS) Semester 1 2024 - DUE April 2024 ;100% TRUSTED workings, explanations and solutions.

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FIN3702 Assignment 2 (COMPLETE ANSWERS) Semester 1 2024 - DUE April 2024 ;100% TRUSTED workings, explanations and solutions.

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  • April 17, 2024
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  • 2023/2024
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FIN3702 Assignment 2
(COMPLETE ANSWERS)
Semester 1 2024 - DUE
April 2024 ;100%
TRUSTED workings,




ADMIN
[COMPANY NAME]

, Question 1 Not yet answered Marked out of 1.00 QUIZ Commercial banks
lend unsecured short-term funds in the following three basicways. 1. Single-
payment notes, lines ofcredit, and commercial paper. 2. Single-payment
notes, lines ofcredit, and revolving creditagreements. 3. Single-payment
notes, revolvingcredit agreements, andcommercial paper. 4. Commercial
paper, lines ofcredit, and revolving creditagreements. Question 2 Not yet
answered Marked out of 1.00 Question 3 Not yet answered Marked out of
1.00 Tinashe Mining borrowed R100 000 forone year under a line of credit
with astated interest rate of 7.5% and a 15%compensating balance. Normally,
thefi rm keeps almost no money in itschecking account. Based on
thisinformation, the effective annual interestrate on the loan is approximately
… 1. 7.2%. 2. 7.5%. 3. 8.0%. 4. 8.8%. In the next planning period, a fi rm
plansto change its policy of all cash sales andinitiate a credit policy requiring
paymentwithin 30 days. The statements that willbe directly affected
immediately are the… 1. pro forma balance sheet andcash budget. 2. cash
budget and statement ofretained earnings. 3. pro forma income statement
andpro forma balance sheet. 4. pro forma income statement, proforma
balance sheet and cashbudget. Question 4 Not yet answered Marked out of
1.00 Other things held constant, which of thefollowing would tend to reduce
the cashconversion cycle? 1. Take all discounts that areoffered. 2. Offer
longer payment terms tocustomers. 3. Carry a constant amount ofreceivables
as sales decline. 4. Continue to take all discountsthat are offered and pay on
thenet date. 5. Place larger orders for rawmaterials to take advantage ofprice
breaks.



For the first question, the correct answer is option 2: Single-payment notes,
lines of credit, and revolving credit agreements.

For the third question, let's calculate the effective annual interest rate (EAR)
on the loan:

Given:

 Loan amount (principal), P = R100,000
 Stated interest rate, r = 7.5%
 Compensating balance, CB = 15%

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