Fellion Bank is considering a loan secured by accounts receivable to ABC Group Inc. Iwho wish to borrow as much as possible). The bank's policy is to accept as collateral accounts of customers whose average payment period is no more than 16 days beyond the 45 day credit period and have an average account age that is no more than 5 days beyond the customer's average payment period. The ABC Group's accounts receivable balances, ages and average payment period for each credit customer are given below. Customer Accounts Receivable 10,000 Average Age of Account 65 Average Payment Period of Customer A 70 40 50 B 25,000 40,000 50 55 D 20,000 20 45 E 30,000 10 55 F 15,000 60 50 G 50 65 H 20,000 25,000 185,000 12 50 Total 20.000 90 N 50 25.000 185,000 Total Required: (a) Calculate the dollar amount of acceptable collateral held by ABC Group, (b) If the bank will advance 72 percent against the acceptable collateral, how much can the firm borrow? Paragraph v 1 Fellion Bank is considering a loan secured by accounts receivable to ABC Group Inc. who wish to borrow as much as possible). The bank's policy is to accept as collateral accounts of customers whose average payment period is no more than 16 days beyond the 45 day credit period and have an average account age that is no more than 5 days beyond the customer's average payment period. The ABC Group's accounts receivable balances, ages and average payment period for each credit customer are given below. Customer Accounts Receivable 10.000 Average Age of Account 65 Average Payment Period of Customer 70 40 SO 50 55 25,000 40,000 20,000 30,000 15,000 20 D E 45 10 55 F 60 50 G 20,000 50 65 H 25,000 12 8 Total 185,000 Fellion Bank is considering a loan secured by accounts receivable to ABC Group Inc. Iwho wish to borrow as much as possible). The bank's policy is to accept as collateral accounts of customers whose average payment period is no more than 16 days beyond the 45 day credit period and have an average account age that is no more than 5 days beyond the customer's average payment period. The ABC Group's accounts receivable balances, ages and average payment period for each credit customer are given below. Customer Accounts Receivable 10,000 Average Age of Account 65 Average Payment Period of Customer A 70 40 50 B 25,000 40,000 50 55 D 20,000 20 45 E 30,000 10 55 F 15,000 60 50 G 50 65 H 20,000 25,000 185,000 12 50 Total 20.000 90 N 50 25.000 185,000 Total Required: (a) Calculate the dollar amount of acceptable collateral held by ABC Group, (b) If the bank will advance 72 percent against the acceptable collateral, how much can the firm borrow? Paragraph v 1 Fellion Bank is considering a loan secured by accounts receivable to ABC Group Inc. who wish to borrow as much as possible). The bank's policy is to accept as collateral accounts of customers whose average payment period is no more than 16 days beyond the 45 day credit period and have an average account age that is no more than 5 days beyond the customer's average payment period. The ABC Group's accounts receivable balances, ages and average payment period for each credit customer are given below. Customer Accounts Receivable 10.000 Average Age of Account 65 Average Payment Period of Customer 70 40 SO 50 55 25,000 40,000 20,000 30,000 15,000 20 D E 45 10 55 F 60 50 G 20,000 50 65 H 25,000 12 8 Total 185,000
