User Account

All Pages

Determine the annual financing cost

Assignment Help Finance Basics
Reference no: EM131120265

Designer Textiles, Inc., is considering factoring its receivables. The company's average collection period is 60 days, and its average level of receivables is $2.5 million. Designer's bad-debt losses average $15,000 a month. If the company factors its receivables, it will save $4,000 a month by eliminating its credit department. The factor has indicated that it requires a 10 percent reserve for returns and allowances and charges a 2.5 percent factoring commission. The factor will advance Designer funds at 4 percentage points over prime, which is currently 8 percent.

a. Determine the annual financing cost, before considering cost savings and bad-debt losses.

b. Determine the annual financing cost, after considering cost savings and bad-debt losses.

Reference no: EM131120265

Questions Cloud

Discuss how you anticipate accepting your own mortality : After reading your text on the dying process, discuss how you anticipate accepting your own mortality
Calculate the curvature of the helix : Calculate the curvature of the helix. Does there exist a point of maximum or minimum curvature? If so, where? Find a parameterization that covers the portion of the cylinder with x
Argument that conforms to one of valid argument : Create an argument that conforms to one of the valid argument forms discussed as a: modus ponens, modus tollens, hypothetical syllogism, disjunctive syllogism, or constructive dilemma. Use capital letters to make substitution instances of your arg..
What are the cash collections budgeted for june : What are the cash collections budgeted for June? What are the budgeted cash payments in June for inventory purchases? What is the balance of accounts payable on the June 30 budgeted balance sheet?
Determine the annual financing cost : Determine the annual financing cost, before considering cost savings and bad-debt losses. Determine the annual financing cost, after considering cost savings and bad-debt losses.
Example of something : 1. What is art? Explain what you think makes a work of art "art." Provide an example of something that is art, according to your understanding, and an example of something that is not art, as well. Be sure to explain why these examples do and don'..
Calculate the annual financing cost for the pledged : Ranger's average collection period is 50 days, and it has receivables totaling $5 million that the bank has indicated are acceptable as collateral. Calculate the annual financing cost for the pledged receivables.
Application-antimicrobial agents : Antimicrobial agents are essential components in the treatment of various bacterial infections as they help to kill or prevent the growth of microbes such as bacteria, fungi, and protozoans.
What type of students who enrolled in iecc program : ?Write an essay on what type of students who enrolled in IECC program. Introduction, 3 paragraph body and a conclusion.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd