Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Suppose that Moonstar products inc has the agreement with shady finance company to factor its receivables. Shady charges the flat commission of 2% of receivables factored, plus 6% a year interest on outstanding balance. It also subtracts a reserve of 10% for returned and damaged materials. Interest and commission are paid in advance. No interest is charged on reserve or commission. If average level of outstanding receivables is= $700,000, and if they are turned over four times a year (therefore commission is paid four times a year), then what is effective quarterly interest rate charged by Shady for this arrangement?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914522

Have any Question? 


Related Questions in Basic Finance

An article observes the federal reserve announced that it

An article observes: "The Federal Reserve announced that it would open currency swap lines-in essence, printing dollars and exchanging them for euros. . . ." Why would the Fed and the European Central Bank enter into suc ...

1 why is notional principal often exchanged in a currency

1 .Why is notional principal often exchanged in a currency swap but not in an interest rate or equity swap? Why would the parties to a currency swap choose not to exchange the notional principal ? 2 .Explain how the foll ...

Comment on the current credit risk assumed for each of the

Comment on the current credit risk assumed for each of the following positions. Treat them separately; that is, not combined with any other instruments. a. You are short an out-of-the-money interest rate call option. b. ...

What is storage why is it risky what role does it play in

What is storage? Why is it risky? What role does it play in the economy? Why is delivery important if so few futures contracts end in delivery? What are the major functions of derivative markets in an economy? Why is spe ...

Suppose that you wish to buy stock and protect yourself

Suppose that you wish to buy stock and protect yourself against a downside movement in its price. You consider both a covered call and a protective put. What factors will affect your decision? You have inherited some sto ...

1 what industrial and national capital structure patterns

1. What industrial and national capital structure patterns are exhibited globally? What factors seem to be driving these patterns? 2. What is the observed relationship between debt ratios and profitability, and the perce ...

1 the vinyl cd co is going to take on a project that is

1. The Vinyl CD Co. is going to take on a project that is expected to increase its EBIT by $80,000, its fixed cost cash expenditures by $125,000, and its depreciation and amortization by $75,000 next year. If the project ...

1 describe and contrast the role of rfdc and rfid for

1. Describe and contrast the role of RFDC and RFID for logistics and supply chain applications. 2. Discuss the relative benefits of software purchase, use of third-party providers, and use of application service provider ...

What is the goal with regard to managing accounts payable

What is the goal with regard to managing accounts payable as it relates to the cash conversion cycle? Briefly describe the process involved in managing the accounts payable function.

Finance helpdescribe how to maximize the value of each

Finance help Describe how to maximize the value of each purchase by utilizing a cost-benefit analysis to make rational decisions about corporate spending, financing projects, or investments. Would you consider cost-benef ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen