Finance unlimited is examining three possible funding methods for current assets. Details follow:
Stretch payables: Supplier terms: 2/10 Net 30
Finance U. currently pays within the discount period
Finance U. is considering stretching 20 days to end of net period
Line of credit: Loan Terms: 2.5% per month
A 3% compensating balance must be maintained by the bank
Factoring receivables: Sell receivables to a factor at a 2.5% discount
Invoice terms are 1/20 Net 30
30% of customer take the discount
The remainder pay on day 35
By stretching payables and losing a discount, the firm is paying a finance charge of what?
Recently Asked Questions
- What two types of communication processes does diffusion of innovations research suggest are particularly important to the spread of technology throughout
- Small groups such as co-workers or club members who meet for instrumental reasons-they want to work together to meet common goals-are called :
- Which of the following is not part of network centrality ?