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Raymond Manufacturing faces a liquidity crisis-it requires a loan of $100,000 for 1 month. Having no source of additional unsecured borrowing,
The firm must find a secured short-term lender. The firm's accounts receivable are quite low, but it's inventory is considered liquid and reasonably good collateral. The book value of inventory is $300,000, of which $120,000 is finished goods. (1) City-Wide Bank will create a $100,000 trust receipt loan against finished goods inventory. The annual interest rate on loan is 12 percent on the outstanding loan balance plus a 0.25 percent administration fee levied against the $100,000 initial loan amount. Because it can be liquidated as inventory is sold, the average amount owed over month is expected to be $75,000. (2) Sun State Bank will lend $100,000 against a floating lien on book value of inventory for the 1-month period at an annual interest rate of 13 percent. (3) Citizens' Bank and Trust will lend $100,000 against a warehouse receipt on finished goods inventory and charge 15 percent annual interest on the outstanding loan balance. A 0.5 percent warehousing fee will be levied against the average amount borrowed. Because loan will be liquidated as inventory is sold, the average loan balance is expected to be $60,000. a. Evaluate the dollar cost of each of proposed plans for obtaining an initial loan amount of $100,000. b. Which plan do you recommend? Why? c. If the firm had made a purchase of $100,000 for which it had been provided terms of 2/10 net 30, would it increase the firm's profitability to provide up the discount and not borrow as recommended in part b? Why or why not?
Determine the amount of overhead and Calculate the amount of overhead that Larkspur will assign to the standard line if it uses an ABC system.
question consider that kent manufacturing has two categories of overhead quality inspection and material handling. the
Profit performance effects for Variable manufacturing cost variance and Identify the major cause of Markley Division's unfavorable profit performance
Sixty pounds of corn and 25 lb of hops are available. Formulate an LP that can be used to maximize revenue. Solve the LP graphically.
roland amp sons music ltd.s comparative balance sheets at december 31 20x7 and 20x8 and its income statement for the
In the previous two months, E&P sold over $23,000 to SQU. If SQU fails to make the discount threshold, what entry will E&P have to make upon forfeit of the discount.
Compute the physical units of production and compute equivalent units of production for materials and for conversion costs.
Assume an activity-based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead. Illustrate what is the total amount of overhead costs assigned to the standard mode..
Prepare a corrected Balance Sheet, in proper format use the following categories on the Bal and current Assets
suppose the state decides to increase the sales tax on all goods and services to generate the needed funds. Who will end up paying - the companies or the buyers? Explain
Determine the current financial condition of Eastman Kodak based on its most current quarterly report. Based on your evaluation, Show the most significant "red flags" for its public accounting firm to consider.
finding economic ordering quantity.medarex is considering the lease of an electronic welder costing 210000 from key
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