2A bank offers your firm a revolving creditarrangement for up to $64 million at aninterest rate of 1.60% per quarter. The bankalso requires you to maintain a compensatingbalance of 3% against the unused portion ofthe credit line, to be deposited in a non-interest-bearing account. Assume you have ashort-term investment account at the bankSkippedthat pays .95% per quarter, and assume thatthe bank uses compound interest on itsrevolving credit loans. (Do not roundintermediate calculations. Round the finalanswers to 2 decimal places.)a. What is your effective annual interest rate(an opportunity cost) on the revolving creditarrangement if your firm does not use itduring the year?Effective annual interest rate%b. What is your effective annual interest rateon the lending arrangement if you borrow $32million immediately and repay it in one year?Effective annual interest ratec. What is your effective annual interest rate ifyou borrow $64 million immediately andrepay it in one year?Effective annual interest rate% 1The following is the sales budget forYellowhead Inc. for the first quarter of 2018:MarchJanuary$216,000February$236,000Sales$259,000SkippedCredit sales are collected as follows: 65% inthe month of the sale, 30% in the month afterthe sale, and 5% in the second month afterthe sale.The accounts receivable balance at the end ofthe previous quarter was $100,000 ($70,000of which was uncollected December sales).a. Calculate the sales for November. (Omit $sign in your response.)November salesb. Calculate the sales for December. (Roundthe final answer to 2 decimal places. Omit $sign in your response.)December salesc. Calculate the cash collections from sales foreach month from January through March. (Donot round intermediate calculations. Roundthe final answers to 2 decimal places. Omit$ sign in your response.)

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The following is the sales budget for Yellowhead Inc. for the first quarter of 2018: March January $216,000 February $236,000 Sales $259,000 Credit sales are collected as follows: 65% in the month of the sale, 30% in the month after the sale, and 5% in the second month after the sale. The accounts receivable balance at the end of the previous quarter was $100,000 ($70,000 of which was uncollected December sales). a. Calculate the sales for November. (Omit $ sign in your response.) November sales $ b. Calculate the sales for December. (Round the final answer to 2 decimal places. Omit $ sign in your response.) December sales c. Calculate the cash collections from sales for each month from January through March. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

The following is the sales budget for Yellowhead Inc. for the first quarter of 2018: March January $216,000 February $236,000 Sales $259,000 Credit sales are collected as follows: 65% in the month of the sale, 30% in the month after the sale, and 5% in the second month after the sale. The accounts receivable balance at the end of the previous quarter was $100,000 ($70,000 of which was uncollected December sales). a. Calculate the sales for November. (Omit $ sign in your response.) November sales $ b. Calculate the sales for December. (Round the final answer to 2 decimal places. Omit $ sign in your response.) December sales c. Calculate the cash collections from sales for each month from January through March. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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