暨南大学管理学院财务学管理课件Chapter 10 Working-Capital Management and Short-term Financing.ppt

APR = x interest 1 principal time Example: If you pay $637.50 in interest on $10,000 principal for 9 months: APR = 637.50/10,000 x 1/.75 = .085 = 8.5% APR Cost of Short-Term Credit Annual Percentage Yield (APY) is similar to APR, except that it accounts for compound interest: Cost of Short-Term Credit APY = ( 1 + ) - 1 Annual Percentage Yield (APY) is similar to APR, except that it accounts for compound interest: i m m Cost of Short-Term Credit APY = ( 1 + ) - 1 Annual Percentage Yield (APY) is similar to APR, except that it accounts for compound interest: i m m i = the nominal rate of interest m = the # of compounding periods per year Cost of Short-Term Credit Cost of Short-Term Credit What is the (APY) of a 9% loan with monthly payments? APY = ( 1 + ( .09 / 12 ) 12 -1 ) = .0938 = 9.38% Sources of Short-term Credit Unsecured Sources of Short-term Credit Unsecured Accrued wages and taxes. Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Bank credit. Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Bank credit. Commercial paper. Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Bank credit. Commercial paper. Secured Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Bank credit. Commercial paper. Secured Accounts receivable loans. Sources of Short-term Credit Unsecured Accrued wages and taxes. Trade credit. Bank credit. Commercial paper. Secured Accounts receivable loans. Inventory loans. Chapter 10 – Working-Capital Management and Short-term Financing Working-Capital Management Current Assets Cash, marketable securities, inventory, accounts receivable. Long-Term Assets Equipment, buil