Solution-Determine the annual financing cost to clearfield

Determine the annual financing cost to clearfield

Reference no: EM131120289

The Clearfield Company would be permitted to borrow up to $750,000 secured by inventories under a field warehouse arrangement with a sales finance company. The annual interest rate would be 12 percent. The additional cost of establishing a field warehouse would be $35,000 per year. Determine the annual financing cost to Clearfield under this arrangement if Clearfield borrows

a. $750,000

b. $500,000

Reference no: EM131120289

Questions Cloud

What are the primary reasons a firm holds a liquid asset : What are the primary reasons a firm holds a liquid asset balance?

Hernandez has not logged since 2001 : Hernandez has not logged since 2001. If Hernandez logged and sold 900,000 board feet of timber in 2012, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2012.

Define demand deposits compensating balance : Define the following terms: a. Demand deposits b. Compensating balance c. Disbursement float d. Deposit float e. Lockbox f. Wire transfer g. Depository transfer check h. Zero-balance system i. Draft j. Automated clearinghouse

What other sources of short term funds might : What considerations might lead Anderson and White to disagree about the desirability of using short-term sources of funds to finance the plant expansion? What other sources of short-term funds might the firm consider using to finance the plant expans..

Determine the annual financing cost to clearfield : The annual interest rate would be 12 percent. The additional cost of establishing a field warehouse would be $35,000 per year. Determine the annual financing cost to Clearfield under this arrangement if Clearfield borrows a. $750,000 b. $500,000

Determine the net annual financing cost of this factoring : The factor requires a 10 percent reserve for returns and allowances and charges a 2 percent factoring commission. DuBois can borrow funds from the factor at 3 percentage points over the prime rate (currently 9 percent). Determine the net annual finan..

Determine the annual financing cost to titusville : The interest costs and the service fee are payable at the end of the borrowing period. Titusville has $2 million in receivables that can be pledged as collateral. The average collection period is 45 days. Determine the annual financing cost to Titusv..

Determine the annual financing cost of borrowing each : Assume that Vandergrift has no funds in its account at Commerce Bank that can be used to meet the compensating balance requirement. Determine the annual financing cost of borrowing each of the following amounts under the credit agreement.

The bank that can be used to meet the compensating balance : Determine the annual financing cost of the loan under each of the following conditions: a. Kittanning currently maintains $100,000 in its account at the bank that can be used to meet the compensating balance requirement. b. The company currently has ..

User Account

All Pages

Determine the annual financing cost to clearfield

Reference no: EM131120289

Reference no: EM131120289

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT