During the next four months, a furniture manufacturer will be entering its holiday season. Management expects commercial trade receivables to reach $900,000 and will be seeking a bank loan that will finance 60% of the receivables. The bank charges 8% and an additional 1% service fee of the pledged trade receivables. The average collection period is 45 days. Calculate the company’s APR for the pledged trade receivables.
Answer to relevant QuestionsA furniture company is considering using a factor to manage its trade receivables. The company has $1,600,000 in trade receivables with a 70-day average collection period. The factor charges a 10% reserve for returns and ...Match the following words with the six C’s of credit: character, collateral, capacity, capital, circumstances, and coverage. • Business environment• Security• Insurance• Equity versus debt• Cash flow• TrustComment on the major components of finance. What is the objective of using the leverage analysis technique? One of the capital expenditure projects included in a company’s capital budget was a $10 million investment for the construction of a new manufacturing facility in South America. The preliminary information provided by the ...
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