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Thepotemich [5.8K]
3 years ago
13

During 2004 Elway Corporation transferred inventory to Howell Corporation and agreed to repurchase the merchandise early in 2005

. Howell then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Elway. In 2005 when Elway repurchased the inventory, Howell used the proceeds to repay its bank loan. 4. This transaction is known as a(n):
a. consignment.
b. installment sale.
c. assignment for the benefit of creditors.
d. product financing arrangement.
Business
1 answer:
Svet_ta [14]3 years ago
6 0

Answer:

d. Product financing arrangement.

Explanation:

A business transaction in which an organization sells and agrees to repurchase inventory with the repurchase price equal to the initial or original sales price plus the carrying and financing costs is known as the Product financing arrangement.

A product financing arrangement is more likely to exist when the seller commits to having a third party client purchase the item and then agrees to repurchase the item from the third party client.

It's noteworthy to know, that the seller controls how the item sold under either of the above mentioned situations is analysed and disposed of.

You might be interested in
According to the U.S. Public Health Service, which of the following would be considered a significant financial interest?
adelina 88 [10]

Answer:An equity interest valued at $5,000 owned by the investigator's spouse in a company that produces products related to the investigator's institutional responsibilities.

Explanation: U.S. public health service is an organization of the United States Government, it employs about 6000 employees as public health professionals whose main aim is to promote public health,carry out activities to prevent diseases and advance public health science and Health assurance. An equity interest valued at $5,000 owned by the investigator's spouse in a company that produces products related to the investigator's institutional responsibilities would be considered as a significant Interest.

6 0
3 years ago
rialto company collected $5,000 on account. what impact will this transaction have on the firm's current ratio
VikaD [51]

Answer:

There would be NO IMPACT

Explanation:

From the question, we are informed about, rialto company collected $5,000 on account. In this case there will be no impact of this transaction on the firm's current ratio. The collection on account can be regarded as exchange of asset transaction, any increase change in current asset account cash, then there will be decreases in Accounts Receivable , the ration of current asset to current liabilities gives the current ratio, there is no impact of transaction on the current ratio, since the transaction doesn't affect both the

current asset to current liabilities

7 0
2 years ago
Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A
inn [45]

Answer:

d. If the WACC is 9%, Project B's NPV will be higher than Project A's.

Explanation:

The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment

While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage

Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR

Therefore option d is correct

5 0
2 years ago
The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.75% annually as we
elena-14-01-66 [18.8K]

Answer:

The responses to the given choices can be defined as follows:

Explanation:

Assume is the investment. Each original Class A investment is of the net-front unburden. The portfolio will be worth four years from now:  

\$1,000 \times 5\% = \$50 =\$1,000 - \$50 = \$950\\\\         \$950 (1 + 0.13)^4 = \$950 (1.13)^4 = \$950 (1.630474) = \$1,548.95\\\\  

You will place the total of \$1,000 on class B shares, but only 12b-1will be paid (13-0.75 = 12.25) at a rate of 12.25\% and you'll pay a 1\%back-end load charge if you sell for a four-year period.

After 4 years, your portfolio worth would be:      

\$1,000 (1 + 0.1225)^4 = \$1,437.66   \\\\      \$1,000 (1.1225)^4 = \$1000 (1.587616) = \$ 1,587.62  

Their portfolio worth would be: after charging the backend load fee:      

\$1,587.616 \times 0.99 = \$1,571.74   \\\\                     Amounts     \\\\     Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \     1,548.95\\\\          Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \     1,571.74 \\\\

When the horizon is four years, class B shares are also the best option.

Class A shares would value from a 12-year time frame:

\$950 (1.13)^{12} = \$950 (4.334523) = \$4,117.80  \\\\

In this case, no back-end load is required for Class B securities as the horizon is larger than 5 years.

Its value of the class B shares, therefore, is as follows:

\$1,000 (1.1225) 12 = \$1,000 (4.001623) = \$4,001.62 \\\\Amounts    \\\\\      Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,117.80\\\\          Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \   4,001.62\\\\

Class B shares aren't any longer a valid option in this, prolonged duration. Its impact on class B fees of 0.75\%\ \ 12b-1cumulates over a period and eventually outweighs the 5\% the burden of class A shareholders.

4 0
3 years ago
You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.2 million Czech koruna today i
fredd [130]

Answer: The value of this exchange is $8,816.05.

Explanation:

The problem is dealing with a simple case of arbitrage of exchange rates: Lets assume that

k = koruna

b = baht

Step 1:

Sales Revenue = k2,200,000

(To get USD amount : \frac{2,200,000}{25.36}=$86,750.7886

Purchase Cost = b3,200,000

(To get USD amount : \frac{3,200,000}{41.06}=$77,934.7297

Step 2:

Profit = Sales Revenue - Purchase cost

         = $86,750.7886 - $77,934.7297

         = $8,816.0589

The value of this exchange is $8,816.05.

4 0
3 years ago
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