### Determine the annual financing cost

Assignment Help Financial Management
##### Reference no: EM131336608

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

#### Questions Cloud

 The put-call parity-would be the price of call option : Suppose the price of a share XYZ is 100 at t=0. At t=1, the share-price either increases to 108 or decreases to 88. At t=2, the share-price will either be 120, or 96 (if the share goes up at t=1 and goes down at t=2 and if it goes down at t=1 and goe.. Determine the net annual financing cost : DuBois Apparel Company is considering factoring its receivables.- Determine the net annual financing cost of this factoring arrangement. Differences between rfid and nfc communication technologies : Use the Internet to research the differences between RFID and NFC communication technologies. Then write a paper in current APA format that compares three similarities and three differences, discuss how each of these technologies can be used in pe.. Describe the operations of the colpitts oscillator circuit : Describe the operations of the Colpitts oscillator circuit and explain how it helps in generating clean sinusoidal output? How does the two diodes help in providing linear input to the voltage follower circuit? Determine the annual financing cost : The additional cost of establishing a field warehouse would be \$35,000 per year. Determine the annual financing cost to Clearfield under the arrangement if Clearfield borrows. Sell the security at maximum discount : A CFO wants to sell a security. The CFO knows the true value. She is willing to sell the security at a maximum discount of 15%. A potential investor does not know the true value but does know that the true value equals 100 with probability μ, equals .. Prepare a business memo summarizing what you found : Complete the tutorials in short-term and long-term financing.-  Prepare a business memo summarizing what you found. Transient analysis of the waveforms of the mos inverter : Repeat this problem for the more difficult but realistic case in which the input gate voltage is the output from a preceding CMOS driven by a square wave. Discuss some of the factors that affect investigative tools : The many questions associated with serial murder investigation bring about criticism and public and media pressure. There is a globalization perspective to serial murder investigation. Identify and discuss some of the factors that affect investiga..

### Write a Review

#### Most important factors in creating business valuation

Often business owners are very disappointed when someone does a valuation of their business.  The business owners will say things like "I haven't taken a paycheck in five years" and "I work seven days a week to keep this business running." what are t..

#### According to the capital asset pricing model

Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 8.9%. Company \$1 Discount Store Everything \$5 Forecast return 16% 15% Standard deviation of returns 28% 30% Beta 1.3 1 What would be the fair return for each compa..

#### Estimate the stock price volatility

Suppose that observations on a stock price (in dollars) at the end of each of 15 consecutive weeks. - Estimate the stock price volatility.

#### Single parent and motivational training consultant

Michael Margolis is a single parent and motivational training consultant from Reno, Arizona. He is wondering about potential returns on investments given certain amounts of risk. Michael invested a total of \$6000 in three stocks (\$2000 in each) with ..

#### What is the market price of the bond-to the nearest dollar

If you invested \$1,700 today and another \$2,000 in two years, to the nearest dollar, how much will your investment be worth in seven years? Assume an 5.4% annual compound return. A bond with a par value of \$1,000 and a 6% semi-annual coupon rate has ..

#### Production cash outflow

Production cash outflow. National Beverage Company produces its products two months in advance of anticipated sales and ships to warehouse centers the month before sale. The inventory safety stock is 10% of the anticipated month’s sale.

#### Calculate the payback period and discounted payback period

Calculate the Payback period, Discounted payback period, assuming a 10% cost of capital, Discounted payback period, assuming a 16% cost of capital and Net present value, assuming a 10% cost of capital.

#### Recently hired another company to handle all toxic materials

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for \$1.39 million in anticipation of using it as a..

#### Provide plausible rationale for the stock repurchase

MGM Grand said it plans to eventually buy back up to 20% of its shares (from stockholders) and announced a tender offer for half of them at a 31% premium (over the market price). Provide a plausible rationale for the stock repurchase.

#### Established pattern of increasing its dividends

The common stock of Auto Deliveries sells for \$26.96 a share. The stock is expected to pay \$1.90 per share next year when the annual dividend is distributed. Auto Deliveries has established a pattern of increasing its dividends by 4.7 percent annuall..

#### About the produces motorcycle batteries

Prestopino Corporation produces motorcycle batteries. Prestopino turns out 2,100 batteries a day at a cost of \$5 per battery for materials and labor. It takes the firm 23 days to convert raw materials into a battery. Prestopino allows its customers 4..

#### Actions would increase the companys current ratio

Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio?