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Author Question: Lockbox arrangement benefits include A) increased cash flows from delays in uncollectible check ... (Read 82 times)

karateprodigy

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on: Jul 10, 2018
Lockbox arrangement benefits include
 
  A) increased cash flows from delays in uncollectible check processing.
  B) elimination of bank charges for handling and audit functions.
  C) increased working capital from shorter receivables/cash transformation time.
  D) all of the above are benefits from this arrangement.

Question 2

You put 20 down on a home with a purchase price of 150,000, or 30,000. The remaining balance will be 120,000. A bank will loan you this remaining balance at 4.375 APR.
 
  You will make monthly payments with a 20-year payment schedule. What is the monthly annuity payment under this schedule?
  A) 751.11
  B) 830.53
  C) 910.12
  D) 5,250.18


1_Step_At_ATime

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Reply #1 on: Jul 10, 2018
Answer to Question 1

C

Answer to Question 2

Answer: A
Explanation: A) The bank loan of 120,000 is the PV.
The PVIFA using r = = 0.36458 and n = 20  12 = 240 periods is 159.7643.
The monthly annuity payment = PMT = = = 751.11.
MODE = END
INPUT 240 4.375/12 -120,000 ? 0
KEY N I/Y PV PMT FV
CPT 751.11


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