Compute the annual approximate interest cost of not taking a discount using the following scenarios. What...
- Compute the annual approximate
interest cost of not taking a discount using the following
scenarios. What conclusion can be drawn from the calculations?
- 2/10 net 20
- 2/10 net 30
- 2/10 net 40
- 2/10 net 50
- 2/10 net 60
- On January 2, 20X1, City Hospital established a line of credit with First Union National Bank. The terms of the line of credit called for a $200,000 maximum loan with an interest of 11 percent. Then compensating balance requirement is 15 percent of the total line of credit (with no additional fees charged).
- What is the effective interest rate for City Hospital if 50 percent of the total amount were used during the year?
- How would the answer to part of a change if the additional fees were $500?
- How would the answer to part of a change if the additional fees were $1,000
Homework Answers
Add Answer to:
Compute the annual approximate
interest cost of not taking a discount using the following
scenarios. What...
Qno.2 (a) What would be the approximate cost of not taking a discount if the credit...
Qno.2 (a) What would be the approximate cost of not taking a discount if the credit terms of "2/10, net 40" are offered? (Assume a 365-day year). (b) Ninety-percent of XYZ's total sales of $600,000 is on credit. Caleulate the average collection period and year-end receivables if its year-end receivables turnover is 5.
Harper Engine Company needs $638,000 to take a cash discount of 1.50/15, net 65. A banker...
Harper Engine Company needs $638,000 to take a cash discount of 1.50/15, net 65. A banker will loan the money for 50 days at an interest cost of $16,800. a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest L % b. How much would it cost (in percentage terms) if Harper did not take the...
Neveready Flashlights, Inc. needs $410,000 to take a cash discount of 2/10, net 60. A banker...
Neveready Flashlights, Inc. needs $410,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $6,600. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost (in percentage terms) if the firm did not take the cash discount, but...
Neveready Flashlights Inc. needs $340,000 to take a cash discount of 2/10, net 60. A banker...
Neveready Flashlights Inc. needs $340,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $5,900. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost (in percentage terms) if the firm did not take the cash...
1. Community Hospital has annual net patient revenues of $150 million. At the present time, payments...
1. Community Hospital has annual net patient revenues of $150 million. At the present time, payments received by the hospital are not deposited for six days on average. The hospital is exploring a lockbox arrangement that promises to cut the six days to one day. If these funds released by the lockbox arrangement can be invested at 8 percent, what will the annual savings be? Assume the bank fee will be $2,000 per month. 2. St. Luke’s Convalescent Center has...
analyzeFinancial information using the above an answer the question Homework Answer the following questions. Be sure...
analyzeFinancial information using the above an answer
the question
Homework Answer the following questions. Be sure to show your work. 1. Community Hospital has annual net patient revenues of $150 million. At the present time, payments received by the hospital are not deposited for six days on average. The hospital is exploring a lockbox arrangement that promises to cut the six days to one day. If these funds released by the lockbox arrangement can be invested at 8 percent, what...
Harper Engine Company needs $634,000 to take a cash discount of 2.50/20, net 120. A banker...
Harper Engine Company needs $634,000 to take a cash discount of 2.50/20, net 120. A banker will loan the money for 100 days at an interest cost of $14,700. a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest b. How much would it cost (in percentage terms) if Harper did not take the cash discount...
Flashlights, Inc needs $500,000 to take a cash discount of 2/10, net 80 A 8 banker wll loan the m...
Flashlights, Inc needs $500,000 to take a cash discount of 2/10, net 80 A 8 banker wll loan the money for 70 days at an interest cost of $7.500 a What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate celculetions. Round the final answer to 2 decimal places) b. How much would it cost (in percentage terms) if the firm did not take the cash discount, but paid the bill...
Neveready Flashlights Inc. needs $490,000 to take a cash discount of 2/10, net 60. A banker...
Neveready Flashlights Inc. needs $490,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $7,400. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost in percentage terms) ir the firm did not take the cash discount, but...
Paragraph Part 1: Interest and Inventory Costs Instructions: Calculate the following HNL finance scenarios. 1. On...
Paragraph Part 1: Interest and Inventory Costs Instructions: Calculate the following HNL finance scenarios. 1. On January 3, 2016. HNL negotiated a short-term loan of $685,000. The loan was due October 1 2016, and carried a 6.86% interest rate. a What is the total amount HNL paid on the maturity date? Use ordinary interest to calculate the interest. Show your work in the space provided. b. In a few complete sentences, explain how you calculated the answer. 2. On January...
Qno.2 (a) What would be the approximate cost of not taking a discount if the credit terms of "2/10, net 40" are offered? (Assume a 365-day year). (b) Ninety-percent of XYZ's total sales of $600,000 is on credit. Caleulate the average collection period and year-end receivables if its year-end receivables turnover is 5.
Harper Engine Company needs $638,000 to take a cash discount of 1.50/15, net 65. A banker will loan the money for 50 days at an interest cost of $16,800. a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest L % b. How much would it cost (in percentage terms) if Harper did not take the...
analyzeFinancial information using the above an answer
the question
Homework Answer the following questions. Be sure to show your work. 1. Community Hospital has annual net patient revenues of $150 million. At the present time, payments received by the hospital are not deposited for six days on average. The hospital is exploring a lockbox arrangement that promises to cut the six days to one day. If these funds released by the lockbox arrangement can be invested at 8 percent, what...
Harper Engine Company needs $634,000 to take a cash discount of 2.50/20, net 120. A banker will loan the money for 100 days at an interest cost of $14,700. a. What is the effective rate on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest b. How much would it cost (in percentage terms) if Harper did not take the cash discount...
Flashlights, Inc needs $500,000 to take a cash discount of 2/10, net 80 A 8 banker wll loan the money for 70 days at an interest cost of $7.500 a What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate celculetions. Round the final answer to 2 decimal places) b. How much would it cost (in percentage terms) if the firm did not take the cash discount, but paid the bill...
Neveready Flashlights Inc. needs $490,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $7,400. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost in percentage terms) ir the firm did not take the cash discount, but...
Paragraph Part 1: Interest and Inventory Costs Instructions: Calculate the following HNL finance scenarios. 1. On January 3, 2016. HNL negotiated a short-term loan of $685,000. The loan was due October 1 2016, and carried a 6.86% interest rate. a What is the total amount HNL paid on the maturity date? Use ordinary interest to calculate the interest. Show your work in the space provided. b. In a few complete sentences, explain how you calculated the answer. 2. On January...
Most questions answered within 3 hours.
-
wWhat situation is ideally suited to valuation with the dividend
growth model?
asked 38 seconds ago -
Direct Labor Variances
Bellingham Company produces a product that requires 2 standard
direct labor hours per...
asked 11 seconds from now -
A munitions warehouse contains 50 bombs, of which 3 are
defective (6%). A sample of 10...
asked 16 minutes ago -
List 6 factors you should consider when designing indexes.
Please explain your answers.
asked 14 minutes ago -
Hello
I am beginner in JAVA but that does not mean i
cant do a perfect...
asked 11 minutes ago -
is
it possible for a change in one nucleotide of an organism’s DNA to
result in...
asked 44 minutes ago -
Project 5 - intro to python
Write a program in python that calculates the amount of...
asked 40 minutes ago -
Compare/Contrast the following: protein/enzyme, ligand/substrate,
channel protein/carrier protein,
exocytosis/endocytosis.
asked 50 minutes ago -
A researcher asks: Are high school students who have tried
alcohol more likely to have had...
asked 52 minutes ago -
Use a style sheet to define the following rules and implement
the given HTML code. Please...
asked 53 minutes ago -
How many grams of KBr are contained in 200 mL of a 0.310 M KBr
solution?...
asked 56 minutes ago -
The three most valuable (in terms of current exploitation)
marine physical resources in order from most...
asked 1 hour ago