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Unformatted text preview: $2 million in 1994 with the understanding that the loan will be repaid and off the books for atleast a 30 -day period during the year and be secured by the accounts receivable and inventory. The interest on the line of credit would be 9%. The companys sales are seasonal with 80% volume sold between August and November. Although the company quoted net 30 days to pay, customers usually took 60 days. The process is not that complex and all runs are completed within the same day, meaning there was no work in process at the end of the day. Total purchases in 1994 were forecast at $3 million. The production manager believes that the company will be able to hold expenditures equal to depreciation, but is worried about reaching full capacity. In 1993, overtime expenses had amounted to $185,000. Production and sales amounts in each month tended to be equal. Pro forma income statements and balance sheets have been prepared for Mr. McClintock....
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This note was uploaded on 03/15/2011 for the course BLAW 3201 taught by Professor Fry during the Spring '08 term at LSU.
- Spring '08
- Business Law