Charmin Paper Company sells to the 12 accounts listed next,

Receivable Average Age of

Balance the account

Account Outstanding Over the last year

A $ 60,800 22

B 168,000 43

C 78,300 19

D 24,300 55

E 58,900 42

F 238,000 39

G 30,400 16

H 374,000 72

I 41,400 32

J 96,500 58

K 292,000 17

L 67,700 37

Capital Financial Corporation will lend 90% against account balances that have averaged 30 days or less, 60 percent of 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 loan.

The current prime rate is 15.5 percent, and capital charges 4.5 percent over prime to Charmin as annual loan rate.

a. Determine the maximum loan for which charmin Paper Company could quality

Minimum loan amount $..............................

b. Determine how much one month's interest expense would be on the loan balance determined in part a (Do not round intermediate calculations, Round your final answers to 2 decimal places)

Interest expense $............................