Charming Paper Company sells to the 12 accounts listed here. Receivable Balance Average Age of the...

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Charming Paper Company sells to the 12 accounts listed here. Receivable Balance Average Age of the Account Over the Last Outstanding Account Year B ADUD ELUHHAY K $ 69.400 20 140.000 44 78.900 17 21,500 61 50,800 43 261.000 39.200 24 369.000 44.790 98,800 223.008 68.908 Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less, 80 percent for account balances between 31 and 40 days, and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. The current prime rate is 9.50 percent, and Capital charges 3.50 percent over prime to Charming as its annual loan rate. a. Determine the maximum loan for which Charming Paper Company could qualify. Maximum loan amount b. Determine how much one month's Interest expense would be on the loan balance determined in part a. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Interest expense Charming Paper Company sells to the 12 accounts listed here. Receivable Balance Average Age of the Account Over the Last Outstanding Account Year B ADUD ELUHHAY K $ 69.400 20 140.000 44 78.900 17 21,500 61 50,800 43 261.000 39.200 24 369.000 44.790 98,800 223.008 68.908 Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less, 80 percent for account balances between 31 and 40 days, and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. The current prime rate is 9.50 percent, and Capital charges 3.50 percent over prime to Charming as its annual loan rate. a. Determine the maximum loan for which Charming Paper Company could qualify. Maximum loan amount b. Determine how much one month's Interest expense would be on the loan balance determined in part a. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Interest expense

Answer rating: 100% (QA)

To determine the maximum loan for which Charming Paper Company could qualify we need to calculate th... View the full answer