Question
Receivable ld Maple Sugar Company sells to the 12 accounts listed below. Account Balance Outstanding Average Age of the Account over the Last Year
Receivable ld Maple Sugar Company sells to the 12 accounts listed below. Account Balance Outstanding Average Age of the Account over the Last Year A $60,000 28 120,000 43 C 70,000 10 D 20,000 52 50,000 42 F 220,000 34 G 30,000 16 H 300,000 65 I 40,000 33 J 90,000 50 K 210,000 60,000 14 35 Trump 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 as adequate accounts for a loan. The current prime rate is 10 percent, and Trump Financial Corporation charges Prime plus 5% to Marla Maple Sugar Company as its annual loan rate. a. Determine the maximum loan for which Marla Maple Sugar Company could qualify. Maximum loan amount b. Determine how much one month's interest expense would be on the loan balance determined in part a. Interest expense
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