If a Company Sells (Discounts)a Bank Bill with a Face

question 23

Multiple Choice

If a company sells (discounts) a bank bill with a face value of $500 000,a term to maturity of 120 days,and a yield of 8.45% per annum,how much will the company raise on the issue? (Ignore transaction fees.)

• A) $391 295.03
• B) $445 312.02
• C) $486 485.05
• D) $486 302.48

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Definitions:

Outsourcing

The practice of hiring external firms or individuals to perform tasks, handle operations or provide services that are either difficult to manage or are outside the company's core competencies.

Employee Leasing

The practice of hiring a workforce through an intermediary that provides personnel to work on a temporary or long-term basis.

PEO

A Professional Employer Organization, which is a firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers' compensation, recruiting, risk/safety management, and training and development.

Employment Costs

The total expenses borne by employers to hire and sustain employees, including wages, benefits, training, and other related expenses.