Holiday Tree Farm has a cash balance of $34 and a short-term loan balance of $180 at the beginning of Q1. The net cash inflow for the first quarter is $36 and for the second quarter there is a net cash outflow of $48. All cash shortfalls are funded with short-term debt. The firm pays 2 percent of its prior quarter's ending loan balance as interest each quarter. The minimum cash balance is $20. What is the short-term loan balance at the end of 927 Multiple Choice $184.3 $179.2 $138.6
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- ABC Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $264,854 deficit and a 40% chance for no deficit at all. The line of credit charges 0.57% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 6% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) Group of answer choices $5,385 $5,388 $5,394 $5,391 $5,382cO X HAS cASH BALANCE OF $33 AND SHORT TERM LOAN BALANCE OF $200 AT THE BEGINNING OF QTR 1. THE NET CASH INFLOW FOR THE 1ST QTR IS $89 AND THE FOR THE SECOND QTR THERE IS A NET CAHS OUTFLOW OF $44. aLL CASH SHORTFALLS ARE FUNDED WITH SHORT TERM DEBT. THE FIRM PAYS 2% OF ITS PRIOR QUARTERS ENDING LOAN BALANCE AS INTERST EACH QUARTER. THE MINIMUM CASH BALANCE IS $25. wHAT IS THE SHORT TERM LOAN BALANCE AT THE END OF THE YEAR? available anwsers are 107 111 121 128 133ABC Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $287.945 deficit and a 40% chance for no deficit at all. The line of credit charges 0.56% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 7% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) O $5,617 $5,602 O $5,612 O $5.608 O $5,621
- Green Corporation anticipates a cash requirement of P1,000 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is P30. Requirement: (a) What is the optimal cash balance? (b) What is the average cash balance?Campbell Computing Inc. expects to have sales this year of $30 million under its current credit policy. The company offers a credit term of 2/8, net 20. Currently, 60 percent of paying customers take the discount and rest are paying on time. The bad debt loss is 2 percent. The company has a profit margin of 20%, and uses a 5% short-term bank loan to finance its accounts receivables. With 365-day a year assumption, please calculate the following items: a. The bad debt loss of the company this year b. The annual discount given to customers c. The accounts receivables level d. The financing cost of accounts receivablesCompany is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $240,938 deficit and a 40% chance for no deficit at all. The line of credit charges 0.59% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 7% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) Group of answer choices: $5,255 $5,240 $5,251 $5,260 $5,246
- To meet any shortfall in the previous question, NewBank will borrow the cash in the fed funds market. Management decides to borrow the needed funds for the remainder of the month (now 29 days). The required yield on a discount basis is 2.9%. What does the balance sheet look like after this transaction?HAPPY Company makes credit sales of P1,800,000 annually. The average age of accounts receivable is 30 days. Management consider shortening credit terms to 20 days. Cost of money is 12%. How much will the company save from financing charges? Use 360-day year MY ANSWER IS 6,000 AND 12,000. WHAT IS THE CORRECT ANSWER?Cray Computing needs a 8-month loan for $300,000. Its bank quotes a simple interest rate of 12% on the loan. What is the annual percentage rate (APR)? What is the period rate if there is a compensating balance requirement of 40% of the loan amount?
- XXX, Inc. finances tis seasonal working capital need with short-term bank loans. Management plans to borrow $65,000 for a year. The bank has offered the company a 3.5 percent discounted loan with a 1.5 percent origination fee. What are the interest payment and the origination fee requiered by the loan? What is the rate of interest charged by the bank?Green Corporation anticipates a cash requirement of P1,500 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is P30. (a) What is the optimal cash balance? (b) What is the average cash balance? CHOOSE THE CORRECT ANSWER FOR A AND B(A) P1,432.05 and (B) P566.03(A) P2,121.32 and (B) P8060.66(A) P1,121.32 and (B) P1060.66(A) P2,121.32 and (B) P1060.66(A) P1,732.05 and (B) P866.03Melody Dairy has a line of credit with its bank. The firm plans to borrow $400,000 at a rate of 10 percent. The bank requires a 15% compensating balance and the firm currently maintains $20,000 in its account at the bank that can be used to meet the compensating balance requirement. Determine the annual finance cost to Melody of this loan.