QUESTION 15

The forecasts of Dalton Ltd's

cash flow indicate that there will be a cash deficit of R898 100 in April, May,

and June 2025. In financing this shortage, the company will issue a 90-day

banker’s acceptance bill, which its bank will guarantee by accepting it, and

the bill will then be discounted in the market with the relevant discount rate.

The company will receive R970 100 in exchange for the bill, which will require

that the company pay the nominal amount of R1 000 000 within 90 days.

The cost of the bankers’

acceptance for the company (which is a yield to the bank) is ….

a.    4,76%

b.    5.73%

c.     6.11%

d.    7.6%

NB. Ignore the capital

budgeting process depreciation calculations.