Corporate Finance – Chapter 27- Short Term Financial
Planning
Homework Answers
Interest expense on laond = 540000 * 9.6% = 51840
Warehouse fees = 540000 * 1% = 540000 * 1% = 5400
Total charges = Interest expense + Warehouse fees = 51840 + 5400 = 57240
Warehouse expenses are paid at the beginning of the loan period and hence the net proceeds will be reduced by the warehouse fees.
Net proceeds = 540000 - 5400 = 534600
Effective annual rate = Total charges / Net proceeds = 57240 / 534600
= 10.71%
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Corporate Finance – Chapter 27- Short Term Financial
Planning
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and answer the following questions
hints:-
13. cash provided (used) by operating activities, investing
activities, and financing activities. 14. cash-based net income.
15. estimate of uncollectible accounts receivable. 16. calculate
and interpret accounts receivable ratio (most recent and prior
period).
hints:-
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