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Author Question: MovieTone, Inc. is a producer and distributor of specialty DVDs. It sells directly to large retail ... (Read 151 times)

kamilo84

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on: May 1, 2019
MovieTone, Inc. is a producer and distributor of specialty DVDs. It sells directly to large retail firms on terms of net 60 and has average monthly sales of $350,000. It has recently decided to pledge all of its accounts receivable to its bank. The bank advances up to 80 percent of the face value of these receivables at a rate of 4 percent over the prime rate, while charging 2.5 percent on all receivables pledged for processing to cover billing and collection services. Prior to this arrangement MovieTone was spending $50,000 a year on its credit department. The prime rate is 6 percent.
a.What is the average level of accounts receivable?
b.What is the effective cost of using this short-term credit for one year?
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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Marked as best answer by kamilo84 on May 1, 2019

polinasid

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Reply #1 on: May 1, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kamilo84

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Reply 2 on: May 1, 2019
Great answer, keep it coming :)

billybob123

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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