Lamar lumber buys 8 million of materials net of discounts

Assignment Help Finance Basics

Reference no: EM13622745

Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 60; and it currently pays after 5 days and takes discounts. Lamar plans to expand, which will require additional financing. Assume 365 days in year for your calculations.

If Lamar decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.

1. What would be the nominal cost of that credit? Round your answer to two decimal places.

2. What would be the effective cost of that credit? Round your answer to two decimal places.

3. If the company could get the funds from a bank at a rate of 8%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? Round your answer to two decimal places.

4. Should Lamar use bank debt or additional trade credit?

Reference no: EM13622745

Questions Cloud

A bicycle tire with a radius of 042 m has a linear velocity : a bicycle tire with a radius of 0.42 m has a linear velocity of 2.6 ms and an tangential acceleration of - 1.0 ms2what

Assume a corporation has earnings before depreciation and : 1. assume a corporation has earnings before depreciation and taxes of 82000 depreciation of 45000 and that it has a 30

What is the angular speed in rads of the drive when the : a computer disk drive spins at 7200 rpm when a brief 30 second power outage occurs. during this time the drive slows

Let x be a poisson random variable with mean 20 use the : let x be a poisson random variable with mean 20.a use the markov inequality to obtain an upper bound on p p x gt 26b

Lamar lumber buys 8 million of materials net of discounts : lamar lumber buys 8 million of materials net of discounts on terms of 35 net 60 and it currently pays after 5 days and

Estimate the time constant for such a thermometer neglect : a fluid-expansion thermometer uses liquid freon c 0.22 btulbm middot f rho 85.2 lbmft3 enclosed in a 0.25-in-id

Use a 005 level of significance construct a 95 confidence : at a certain college it is estimated that at most 25 of the students ride bicycles to class. does this seem to be a

You are evaluating two different silicon wafer milling : you are evaluating two different silicon wafer milling machines. the techron i costs 210000 has a three-year life and

What is the the electricrostatic potential due to these : consider a collection of three point charges. two equal charges q1 q2 3.0 nc are on the x-axis at the points x 4.0

User Account

All Pages