Holiday Tree Farm has a cash balance of $34 and a short-term loan balance of $180 at the beginning of Qt. The net cash inflow for the first quarter is $36and 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'sending loan balance as interest each quarter. The minimum cash balance is $20. What is the short-term loan balance at the end of Q2?Multiple Choice$184.3$179.2$138.6$128.4$1931

Ending cash= Net cash flow +Interest on loan +Beginning cash.Interest on loan…

Answered: Holiday Tree Farm has a cash balance of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase from $4.78 million to $5.88 million as a result. Wontaby finances short-term assets at the bank at a cost of 10 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Enter answer in whole dollar not in million.) Annual financing cost $ 110000
The Milton Company currently purchases an average of $18,000 per day in raw materials on credit terms of "net 25." The company expects sales to increase substantially next year and anticipates that its raw material purchases will increase to an average of $22,000 per day. Milton feels that it may need to finance part of this sales expansion by stretching accounts payable. Round your answers to the nearest dollar. Assuming that Milton currently waits until the end of the credit period to pay its raw material suppliers, what is its current level of trade credit? $ If Milton stretches its accounts payable an extra 5 days beyond the due date next year, how much additional short-term funds (that is, trade credit) will be generated? $
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A declining balance loan for $3000 entails paying about $275 for each of 12 months, for a total of about $3300 in payments. The loans interest rate in 18% per year. How much of the loans second payment goes to paying interest? $41.55 $36.75 $42.58 $45 $40.88

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