Work out a short-term financing plan for Dynamic Mattress Company, assuming the limit on the line of
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A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...
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First Quarter Second Quarter Third Quarter Fourth Quarter New borrowing: Bank loan Stretching payables Total 100.0 16.0 116.0 0.0 92.4 92.4 0.0 0.0 0.0 0.0 0.0 0.0 2 Repayments: Bank loan Stretching pavables Total Net new borrowing Plus securities sold Less securities bought Total cash raised Note: Cumulative borrowing and security sales Bank loan Stretching payables Net securities sold Interest payments Bank loan 0.0 0.0 0.0 116.0 25.0 0.0 141.0 0.0 16.0 16.0 76.4 0.0 0.0 76.4 20.0 92.4 112.4 112.4 0.0 0.0 112.4 80.0 0.0 80.0 80.0 0.0 87.8 167.8 6 100.0 16.0 25.0 100.0 92.4 25.0 80.0 0.0 25.0 0.0 0.0 62.8 0.0 0.0 0.0 0.0 141.0 141.0 2.5 0.8 0.5 3.8 72.6 76.4 2.5 4.6 0.5 7.6 120.0 112.4 2.0 Stretching payables 0.0 Interest on securities sold Net interest paid Cash required for operations 2.5 -170.3 167.8 16 TABLE
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Related Book For
Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
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