IDEAS home Printed from https://ideas.repec.org/a/sae/ausman/v8y1983i2p95-103.html
   My bibliography  Save this article

The True Cost of Borrowing Under a Commercial Bill

Author

Listed:
  • Harry G. Stanton

    (Graduate School of Business Administration, University of Melbourne.)

  • John A. Rickard

    (School of Social and Industrial Administration, Griffith University.)

Abstract

In this paper we examine the cost structure of loans obtained by means of a commercial bill and develop a method for calculating the true cost of borrowing. This true cost is expressed as a nominal rate of interest per annum which duly takes into account all relevant borrowing costs, that is, all those costs which are the direct consequence of having taken out the loan. The analysis deals with the common case of renewing the loan (‘rolling over the bill’) for a second period, and the general case where (n–1) renewals are effected is also described.

Suggested Citation

  • Harry G. Stanton & John A. Rickard, 1983. "The True Cost of Borrowing Under a Commercial Bill," Australian Journal of Management, Australian School of Business, vol. 8(2), pages 95-103, December.
    • Handle: RePEc:sae:ausman:v:8:y:1983:i:2:p:95-103
    DOI: 10.1177/031289628300800206
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/031289628300800206
    Download Restriction: no
    File URL: https://libkey.io/10.1177/031289628300800206?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. de Faro, Clovis, 1978. "A Sufficient Condition for a unique Nonnegative Internal Rate of Return: Further Comments," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 13(3), pages 577-584, September.
    2. Bernhard, Richard H., 1980. "A Simplification and an Extension of the Bernhard-deFaro Sufficient Condition for a Unique Non-Negative Internal Rate of Return," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 15(1), pages 201-209, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marchioni, Andrea & Magni, Carlo Alberto, 2018. "Investment decisions and sensitivity analysis: NPV-consistency of rates of return," European Journal of Operational Research, Elsevier, vol. 268(1), pages 361-372.
    2. Carlo Alberto Magni, 2010. "Average Internal Rate of Return and investment decisions: A new perspective," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0021, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    3. Saak, Alexander & Hennessy, David A., 2001. "Well-behaved cash flows," Economics Letters, Elsevier, vol. 73(1), pages 81-88, October.
    4. Magni, Carlo Alberto, 2016. "Capital depreciation and the underdetermination of rate of return: A unifying perspective," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 54-79.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ausman:v:8:y:1983:i:2:p:95-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.agsm.edu.au .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.