As the financial vice president of Mason Co., you are responsible for ensuring that an adequate supply
Question:
As the financial vice president of Mason Co., you are responsible for ensuring that an adequate supply of cash exists to pay operating expenses. The marketing department has secured a huge order that will require funds for increased inventory and employee levels. A budget analysis reveals that a $100,000, 270-day note will be required to adequately fund the production of the order.
Over the past three years, Mason Co. has signed seven notes totaling $200,000 with First National Bank. Each note was for 90 days or less, was issued at prime plus 22%, and was repaid on the due date.
Assume that the class is the bank loan committee of First National Bank. Make an oral presentation to persuade the loan committee to approve the $100,000, 270-day note at prime plus 2%. Recognize that the committee will be hesitant because of the amount of the note, the term of the note, and the lower interest rate. The following facts about :
Mason Co:s five-year history may be used to support your request:
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