Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase from $4.78 million to $5.88 million as a result. Wontaby finances short-term assets at the bank at a cost of 10 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Enter answer in whole dollar not in million.) Annual financing cost $ 110000
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- Van Buren Resources Inc. is considering borrowing $90,000 for 175 days from its bank. Van Buren will pay $3,000 of interest at maturity, and it will repay the $90,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual financing cost. Round your answer to two decimal places. % Calculate the loan’s annual percentage rate. Round your answer to two decimal places. % What is the reason for the difference in your answers to Parts a and b? The does not consider compounding effects.Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4.75 million to $5.85 million as a result. Wontaby finances short - term assets at the bank at a cost of 12 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Enter answer in whole dollar not in million.) Annual financing costNSuncoast Boats Inc. estimates that because of seasonal nature of its business, it will borrow $5,000,000 for 70 days. Suncoast will borrow @ 9% annum using a discount loan. There will be $53,000 in up - front fees. a. Find loan amount b. Find interest. c. Find other cost/fees. d. Find compensating balance. e. Find m and period rate. f. Find Annual Percentage Rate, APR g. Find effective annual rate, EAR.
- Van Buren Resources Inc. is considering borrowing $120,000 for 168 days from its bank. Van Buren will pay $7,000 of interest at maturity, and it will repay the $120,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual financing cost. Round your answer to two decimal places. % Calculate the loan’s annual percentage rate. Round your answer to two decimal places. %HAPPY Company makes credit sales of P1,800,000 annually. The average age of accounts receivable is 30 days. Management consider shortening credit terms to 20 days. Cost of money is 12%. How much will the company save from financing charges? Use 360-day year MY ANSWER IS 6,000 AND 12,000. WHAT IS THE CORRECT ANSWER?ABC has a major supplier that offers a credit term of 2/15, n/45. Cash not yet used for payments are generally kept in an account that earns ABC 2.5% per year. Use 360 days in a year. Compute for the following: 1. Simple annual effective cost of paying on 45th day instead of the 15th day. 2. Compounded annual effective cost of paying on 45th day instead of the 15th day. Please create a detailed solution for the two questions. Thank you
- The Moncton Corporation has annual sales of $31 million. The average collection period is 27 days. What is the average investment in accounts receivable as shown on the balance sheet? Assume 365 days per year. (Enter the answer In dollars. Do not round Intermediate calculations. Round the final answer to nearest whole dollar amount. Omit "$" sign In your response.) Average receivables $A company borrowed $150,000 from a local bank. The loan requires 20 equal annual payments beginning one year from today. Assume an interest rate of 6%. What is the amount of each annual payment? Note: Use tables, Excel, or a financial calculator. Round your final answer to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Table, Excel, or calculator function: Loan Amount: Loan Payment: n=Van Buren Resources Inc. is considering borrowing $100,000 for 182 days from its bank. Van Buren will pay $6,000 of interest at maturity, and it will repay the $100,000 of principal at maturity. a. Calculate the loan’s annual financing cost. b. Calculate the loan’s annual percentage rate. c. What is the reason for the difference in your answers to Parts a and b?
- Company is contemplating factoring its accounts receivable. The factor will acquire P250,000 of the company’s accounts receivable every 2 months. An advance of 75 percent is given by the factor on receivables at an annual charge of 18 percent. There is a 2 percent factor fee associated with receivables purchased. What is the cost of the factoring arrangement? choose the letter of the correct answera. P30,000.00b. P33,750.00c. P63,750.00d. P103,000.00e. P125,000.00CZ Enterprises borrows $202,775 at an interest rate of 10% today and will repay this amount by making 10 semiannual payments. Payments begin in six months. What is the amount of the payments that CZ will need to make? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answer to the nearest cent, $X.XX.) CZ will need to make payments of $ 26,260.31.A loan of $6,000 is repaid by payments of $544 at the end of every three months. Interest is 7% compounded quarterly. (a) How many payments are required to repay the debt? (b) What is the size of the final payment? (a) The number of payments is (Round up to the nearest whole number.) (b) The size of the final payment is S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)