The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makesfour types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The variousrevenue-producing investments, together with annual rates of return, are as follows.Type of Loan/InvestmentAutomobile loansFurniture loansOther secured loansSignature loansRisk-free securities$●Automobile loansThe credit union will have $2,400,000 available for investment during the ng year. State laws and credit union policiesimpose the following restrictions on the composition of the loans and investments.Furniture loansOther secured loans• Risk-free securities may not exceed 30% of the total funds available for investment.Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured,and signature loans).Signature loansRisk-free securities• Furniture loans plus other secured loans may not exceed the automobile loans.• Other secured loans plus signature loans may not exceed the funds invested in risk-free securities.How should the $2,400,000 be allocated to each of the loan/investment alternatives (in dollars) to maximize total annualreturn?$Annual Rate of Return (%)$$9$11$12What is the projected total annual return (in dollars)?1310

Projected Total Annual Return is the sum of investment return which is invested in various…

Answered: The employee credit

Business

Finance

The employee credit

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 11P: The employee credit union at State University is planning the allocation of funds for the coming...

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The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing investments together with annual rates of return are as follows. Type of Loan/Investment Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities ● How should the $2,400,000 Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities to LA The credit union will have $2,400,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. LA Annual Rate of Return (%) • Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other…
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing investments together with annual rates of return are as follows: Type of Loan/Investment Annual Rate of Return (%) Automobile loans 9. Furniture loans 11 Other secured loans 12 Signature loans 13 Risk-free securities 10 The credit union will have $2.3 million alailable for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: • Risk-free securities may not exceed 30% of the total funds available for investment. • Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). • Furniture loans plus other secured loans may not exceed the automobile…
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing investments together with annual rates of return are as follows: Type of Loan/Investment Annual Rate of Return (%) Automobile loans 8 Furniture loans 10 Other secured loans 11 Signature loans 12 Risk-free securities 9 The credit union will have $2 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: Risk-free securities may not exceed 30% of the total funds…
Type of Loan/Investment Automobile loans Furniture loans Other secured loans Signature loans Risk-free securities $1540000 $440000 $ 220000 $ 660000 Annual Rate of Return (%) xxx> 9 What is the projected total annual return? $514800 11. The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition . Risk-free securities may not exceed 30% of the total funds available for investment. • Signature loans may not exceed 10% of the funds invested in an loans (automobile, furniture, other secured, and signature loans). . Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the furids invested in risk-free securities. 12 How should the $2,200,000 be allocated to each of the loan/investment alternatives to maximize total annual return? Automobile loans $ 22 Furniture loans Other secured loans Signature…
Snowflake Manufacturing [SM] has recently come to the bank you work for looking for a $280,000 long-term loan. The following data was submitted with SM's loan application: 2020 $475,200 155,400 175,200 408,600 103,500 13,200 34,200 56,100 64,200 2019 $316,500 120,000 2021 $820,800 Current assets.. Current liabilities. Non-current liabilities. Shareholders' equity.. Operating income... Interest expense... Income tax expense.. Net income... 414,600 60,800 303,700 168,900 7,200 65,400 96,300 106,300 300,000 490,200 208,500 28,500 72,000 108,000 115,000 Operating cash flow... The loan committee has asked you to analyze the data using at least three relevant financial ratios and complete a brief trend analysis. They would also like you to briefly discuss any limitations that might exist when completing this type of analysis and what data dashboards can do to help this. Finally, they have asked that your report also contain a recommendation about whether SM's loan request should be approved.…
17. A financial institution that obtains most of its funds from deposits is a/an: A. investment bank B. commercial bank C. unit trust D. general insurer 18. An investor is looking at a $ 150,000 home. If 30% must be put down and the balance is financed at 9% by Pashtany Bank over the next 30 years, what is the monthly mortgage payment? A. $844.85. B. $895.21. C. $965.55.
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You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) AmountFinanced Number ofPayments MonthlyPayment PaymentsMade RebateFraction FinanceChargeRebate LoanPayoff $1,700 18 $123.89 12
5. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Sources of short-term funds include banks, suppliers, securities firms, and insurance companies. The obligations are in the form of bank loans, trade credit, commercial paper, secured loans, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers will consider the costs of the various sources of financing as part of a cash management strategy. The following statement refers to a source of short-term credit. Select the best term to complete the sentence. as a source of financing is restricted to large firms with exceptionally good credit. The use of Newell Enterprises is a very large manufacturing company. Newell's financial managers use many sources of financing for the company's annual borrowings, which exceed $100 million. Newell's credit rating is excellent. At the moment, the…
You have just been hired as a loan officer at a national bank. Your first assignment is to calculate the amount of the periodic payment (in $) required to amortize (pay off) the following loan being considered by the bank (use Table 12-2). (Round your answer to the nearest cent.) LoanPayment PaymentPeriod Term ofLoan (years) NominalRate (%) Present Value(Amount of Loan) $ every year 12 6 $40,000