Assume that ABC Manufacturing has arranged for a $$500,000$ committed line of credit with First National Bank. The bank charges an annual $\mathrm{.}5\%$ or $\mathrm{.}005$ fee on the unused portion of the line of credit. Due to lower than expected cash disbursements in $2023,$ ABC Manufacturing did not borrow against its $$500,000$ line of credit. Based on this information, calculate the annual commitment fee that ABC Manufacturing paid to First National Bank to have this $$500,000$ committed line of credit available in $2023.$

$27.28.$ Value of Discount: Assume that Midwest Manufacturing, Inc. offers its customers credit terms of $2/12,$ net $35.$ Assuming a $360-$day year, calculate the annual percentage value to a customer of Midwest Manufacturing, if this discount is taken when paying an invoice.

a$.$ Assume that Regional Farm Implement, Inc. is a long$-$time customer of Midwest Manufacturing. Regional Farm Implement has a cost of capital of $10\%.$ When comparing this $10\%$ cost of capital to the annual benefit of taking the discount that you calculated, should Regional Farm Implement take the $2\%$ discount when paying invoices owed to Midwest Manufacturing? Why or why not?

$29.31.$ Ressler Hardware, Inc. has developed a credit scoring model as follows:

Y $=\mathrm{.}000025($INCOME$)+\mathrm{.}5($EMPLOYMT$)$

The INCOME variable is the credit applicant$$s actual dollar amount of annual income. The EMPLOYMT variable is indexed as follows: $0=$ unemployed; $\mathrm{.}5=$ employed part$-$time; and $1\mathrm{.}0=$ employed full$-$time.

Angela wishes to make purchases from Ressler Hardware on credit. Her annual income is $$27,500$ and she is employed part$-$time. Using the credit scoring model shown above, calculate Angela$$s credit score.

a$.$ If Ressler Hardware has a cut$-$off score of $\mathrm{.}8,$ would Angela be granted credit?

$32.33.$ List two possible factors that may affect an individual$$s credit score:

a$.$

b$.$

$34.36.$ Randolph Restaurant Supply Company has projected the following information about its Credit Sales and Credit Purchases during the upcoming two months:

September October

Credit Sales: $55,00065,000$

Credit Purchases: $20,50031,750$

The firm predicts that $60\%$ of its credit sales will be collected in the month of the sale, and the remaining $40\%$ will be collected in the following month. Credit purchases will be paid in the same month in which the credit purchases were made.

The firm expects $$Wages$,$ Taxes, and Expenses$$ to be $50\%$ of credit sales each month. $$Interest Expense$$ is expected to be $$10,000$ per month. A new equipment purchase of $$25,000$ will be made in October for a used delivery van.

As of October $1,$ Randolph Restaurant Supply had a cash balance of $$40,000.$

Given this information, please complete the following cash budget for October:

$37.$ The General Store, Inc. has annual Sales of $$27\mathrm{.}5$ million. The Average Collection Period $($ACP$)$ is $36$ days. Assume that a year has $360$ days, as is used in our WCM textbook.

a$.$ What is the average investment in Accounts Receivable that would likely be found on the firm$$s Balance Sheet?

$38.40.$ Furniture Mart, Inc.$$s Aging Schedule for the firm$$s Accounts Receivable as of December $31,2022$ is as follows:

a$.$ What amount of net customer payments can Furniture Mart expect to actually collect $($i$.$e$.,$ Gross Accounts Receivable less Estimated Value for Doubtful accounts$)?$

b$.$ Assume that Furniture Mart sells to customers on credit terms of $1\%,10,$ net $30$ days.$$ Based on these credit terms, does it appear that this firm