Nikken Microsystems (A). Assume Nikken Microsystems has sold Internet servers to
ID: 2559960 • Letter: N
Question
Nikken Microsystems (A). Assume Nikken Microsystems has sold Internet servers to Telecom España for 682,000. Payment is due in three months and will be made with a trade acceptance from Telecom Espana Acceptance. The acceptance fee is 1.4% per annum of the face amount of the note. IT IK ac(20p anco will to sold ili a 2% por arr um disco m What les 10 annual! od porcontago all-in-cost in euros of this method of trade financing? (NOTE: Assume a 360-day year.) 1. The trade acceptance fee is The discount on the sale of acceptance is Calculate the net proceeds below: (Round to two decimal places.) Round to two decimal places.) Round to two decimal places.) Trade Acceptance Face amount of the receivable Less trade acceptance fee Less discount on the sale of acceptance Net proceeds The annualized percentage all-in cost (AIC) is %. (Round to three decimal places.)Explanation / Answer
Assumptions
values
value of amount receivables
€ 6,82,000.00
maturity period, days
90 days
acceptance fees
1.40%
discount rate on sale of acceptance per annum
4.20%
All in cost of trade acceptance
values
Face amount of the receivables
€ 6,82,000.00
Less: trade acceptance fees
€ 2,387.00
(amount financed*acceptance fees)*(days/360)=(682,000*1.4%)*(90/360) =2387
Less: discount on sale of acceptance
€ 7,161.00
(amount financed*discount rate)*(days/360)=(682,000*4.2%)*(90/360) =7161
Net proceeds
€6,72,452.00
Annualised percentage all in cost (AIC)
5.68%
(acceptance fee + discount)/(amount received)*360/90=(2,387+7,161)/(6,72,452)*360/90
The trade acceptance fee is € 2,387.00
The discount on the sale of acceptance is € 7,161.00
The annualized percentage all in cost (AIC) is 5.679% (5.68% approximately )
Assumptions
values
value of amount receivables
€ 6,82,000.00
maturity period, days
90 days
acceptance fees
1.40%
discount rate on sale of acceptance per annum
4.20%
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