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Malone Feed and Supply Company buys on terms of 1 / 1 0 , net 3 0 , but it has not been taking discounts
Malone Feed and Supply Company buys on terms of net but it has not been taking discounts and has actually been paying in rather than days. Assume that the accounts payable are recorded at full cost, not net of discounts. Malone's balance sheet follows thousands of dollars: Cash $ Accounts payable $ Accounts receivable Notes payable Inventory Accruals Current assets $ Current liabilities $ Longterm debt Fixed assets Common equity Total assets $ Total liabilities and equity $ Malone's suppliers are threatening to stop shipments unless the company begins making prompt payments that is paying within The firm can borrow on a year note call this a current liability from its bank at a rate of discount interest with a compensating balance required. Malones $ in cash is needed for transactions; it cannot be used as part of the compensating balance. Give your answers as positive numbers. How large would the accounts payable balance be if Malone takes discounts? Do not round intermediate calculations. Round your answer to the nearest dollar. $ How large would the accounts payable balance be if it does not take discounts and pays in days? Do not round intermediate calculations. Round your answer to the nearest dollar. $ How large must the bank loan be if Malone takes discounts? Do not round intermediate calculations. Round your answer to the nearest dollar. $ How large must the bank loan be if Malone doesn't take discounts? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Assuming a day year, what are the nominal and effective costs of costly trade credit? Do not round intermediate calculations. Round your answers to two decimal places. Nominal rate: Effective rate: What is the effective cost of the bank loan? Round your answer to two decimal places. Based on these costs, what should Malone do Select
Malone Feed and Supply Company buys on terms of net but it has not been taking discounts and has actually been paying in rather than days. Assume that the accounts payable are recorded at full cost, not net of discounts. Malone's balance sheet follows thousands of dollars:
Cash $ Accounts payable $
Accounts receivable Notes payable
Inventory Accruals
Current assets $ Current liabilities $
Longterm debt
Fixed assets Common equity
Total assets $ Total liabilities and equity $
Malone's suppliers are threatening to stop shipments unless the company begins making prompt payments that is paying within The firm can borrow on a year note call this a current liability from its bank at a rate of discount interest with a compensating balance required. Malones $ in cash is needed for transactions; it cannot be used as part of the compensating balance. Give your answers as positive numbers.
How large would the accounts payable balance be if Malone takes discounts? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
How large would the accounts payable balance be if it does not take discounts and pays in days? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
How large must the bank loan be if Malone takes discounts? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
How large must the bank loan be if Malone doesn't take discounts? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Assuming a day year, what are the nominal and effective costs of costly trade credit? Do not round intermediate calculations. Round your answers to two decimal places.
Nominal rate:
Effective rate:
What is the effective cost of the bank loan? Round your answer to two decimal places.
Based on these costs, what should Malone do
Select
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