1. Charming Paper Company sells to the 12 accounts listed here.

Account	Receivable Balance Outstanding			Average Age of the Account Over the Last Year
A	$	65,400			23
B		201,000			44
C		70,600			17
D		25,600			62
E		52,800			43
F		223,000			35
G		31,900			23
H		349,000			69
I		42,300			37
J		90,700			57
K		274,000			22
L		67,400			37

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 months interest expense would be on the loan balance determined in part a. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Interest expense =

2. Your parents have accumulated a $140,000 nest egg. They have been planning to use this money to pay college costs to be incurred by you and your sister, Courtney. However, Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney $17,000 to help her get started, and they have decided to take year-end vacations costing $7,000 per year for the next four years. Use 7 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then? (Round your final answer to 2 decimal places.)

Funds available for graduate school =

b. You plan to work on a masters and perhaps a PhD. If graduate school costs $21,980 per year, approximately how long will you be able to stay in school based on these funds? (Round your final answer to 2 decimal places.)

Number of years =