I need this question answer general Accounting Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expectedto increase from $4,770,000 to $5,870,000 as a result. Wontaby finances short-term assets at the bank at a cost of 12 percent annually. Calculate the additionalannual financing cost of this change in credit terms. (Use 365 days in a year. Donot round intermediate calculations. Round the final answer to the nearest wholedollar.)

Step 1: Define Additional Annual Financing CostAdditional annual financing cost refers to the extra…

Answered: Wontaby Ltd. is extending its credit…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4.75 million to $5.85 million as a result. Wontaby finances short - term assets at the bank at a cost of 12 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 costN
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