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(Cost of factoring) MDM Inc. Is considering factoring its receivables. The firm has credit sales of $450,000 per month and has an average receivables balance of $900,000 with 60-day credit terms. The factor has offered to extend credit equal to 93% of the receivables factored less interest on the loan at a rate of 1.8 percent per month. The 7 percent difference in the advance and the face value of all receivables factored consist of a 2 percent factoring fee plus a 5 percent reserve, which the factor maintains. In addition, if MDM Inc. decides to factor its receivables, it will sell them all, so that it can reduce its credit department costs by $1,500 a month. What is the cost of borrowing the maximum amount of credit available to MDM Inc. through the factoring agreement? Note: assume a 30- day month and 360 day year. The cost of borrowing the maximum amount of credit available to MDM Inc. through the factoring agreement is ?%
snake creek company has one trusted employee who as the owner said handles all of the book-keeping and paperwork for
What is the firm's levered value if it issues $200,000 of perpetual debt to buy back stock?
Sharpe has $200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?
However, the space occupied by the production of the valve can be used by another production group that is currently leasing space for $55,000 per year. What is the incremental savings of buying the valves?
what is the best estimate of the 1-year forward exchange premium (discount) at which the pound will be selling relative to the euro?
The total reserves are $50 million and current reserve requirement is 7% reserve. If the Fed decreases reserve requirements by 1% then what will be the total deposits in long run?
At the end of the 3 years, you are expected to repay the remaining balance in one installment. How large will this payment be? Please show each step of your reasoning.
What is the "current yield" on the following bond?
Using historical daily returns, you estimated the following Index model for ET incorporated: rET = .01% + 1.75 r S&P500
kads inc. has spent 330000 on research to develop a new computer game. the firm is planning to spend 193000 on a
Consider the following data, Portfolio is invested 16 percent each in A and C, and 68 percent in B. Determine the expected return of the portfolio?
If you enter the above positions when gold equals 1,300, compare the dollars in profit from the three ways of betting against the price of gold if gold ends up at the following prices at time t: 1100, 1150, 1200, 1250, 1300, 1350, 1400, 1450, 1500..
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