TMH%20Revisited - Triangle Manufactured Homes Tim Bauer...

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Triangle Manufactured Homes Tim Bauer ACCY 405 October 26, 2011
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Triangle Manufactured Homes (TMH) Additional Items to Consider
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How Does TMH Make Money? TMH’s business model has  two critical, interrelated  components (1) The retail side of the business manufactured homes. (2) The financing side of the business : providing loans to  transferring  these financial assets  to banks.
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How Does TMH Make Money? TMH offers financing to its customers at  high interest rates . TMH transfers  with recourse almost all  of its retail installment sales  contracts to banks at interest rates  substantially lower  than rates paid by  TMH’s customers. TMH treats these transfers  as sales  under FAS 140.  The amount of income recognized at time of installment transfer is  attributable to the interest  “spread” Spread = Finance charges paid by TMH customers – Finance             charges under TMH’s agreement with the banks.
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How Does TMH Make Money? The banks pay TMH a substantial portion of the contract price 
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This note was uploaded on 11/17/2011 for the course ACCY 405 taught by Professor D during the Winter '11 term at University of Illinois at Urbana–Champaign.

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TMH%20Revisited - Triangle Manufactured Homes Tim Bauer...

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