Jenkins appliances has cash flow problems and needs to

Reference no: EM13572903

Jenkins Appliances has cash flow problems and needs to borrow between $ 50,000 and $60,000 for approximately sixty days. Because the business is small and relatively new, unsecured loans are very hard to get and are expensive when they are available. The bank has offered such a loan at 25%. Climax will lend finance company, has offered an alternative loan if receivables are pledged as collateral.

Climax will lend 70% of the average receivable balance for 14% plus an administrative fee of $1,200. Jenkins average receivable balance is $80,000. Which alternative should Jenkins choose? Calculate using a 360 day year. Assume the bank is willing to lend the same amount as climax.

Reference no: EM13572903

Questions Cloud

The bailey machine tool company thinks it can increase : the bailey machine tool company thinks it can increase sales by 10 million by loosening its credit standards somewhat.

Required rate of return is 115 the dividend is expectedto : mcdonnell manufacturing isexpected to pay a dividend of 1.50 per share at the end of theyear d1 1.50. the stock sells

Southern fabric factors all of its receivables the firm : southern fabric factors all of its receivables. the firm does 150 million in business each year and would have an acp

Joann brower says that alberta gauge companys product-line : alberta gauge company ltd. a small manufacturing company in calgary alberta manufactures three types of electrical

Jenkins appliances has cash flow problems and needs to : jenkins appliances has cash flow problems and needs to borrow between 50000 and 60000 for approximately sixty days.

The company pays out 40 percent of its earnings asdividends : the bouchard companys eps was 6.50 in 2005 up from4.42 in 2000. the company pays out 40 percent of its earnings

The calgary company is attempting to establish a current : the calgary company is attempting to establish a current assets policy. fixed assets are 600000 and the firm plans to

Fuller inc issued 100 8 preferred stock five years ago it : fuller inc issued 100 8 preferred stock five years ago. it is currently selling for 84.50. assuming fuller has to pay

Calculate the effect on the overall companys net operating : tracey douglas is the owner and managing director of heritage garden furniture ltd. a south african company that makes

User Account

All Pages