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Nataliya [291]
3 years ago
6

The George Company has a policy of maintaining an end-of-month cash balance of at least $37,000. In months where a shortfall is

expected, the company can draw in $1,000 increments on a line of credit it has with a local bank, at an interest rate of 12% per annum. All borrowings are assumed for budgeting purposes to occur at the beginning of the month, while all loan repayments (in $1,000 increments of principal) are assumed to occur at the end of the month. Interest is paid at the end of each month. For April, an end-of-month cash balance (prior to any financing and interest expense) of $24,000 is budgeted; for May, an excess of cash collected over cash payments (prior to any interest payments and loan repayments) of $28,000 is anticipated.
1.What is the interest payment estimated for April (there is no bank loan outstanding at the end of March)? (Do not round intermediate calculations.)
2.What is the total financing effect (cash interest plus loan transaction) for May? (Do not round intermediate calculations.)
Business
1 answer:
amid [387]3 years ago
6 0

Answer:

  1. $140
  2. $14,140

Explanation:

1. First find the net amount amount the company borrowed in April:

= Cash balance to be maintained + Loan repayment - Budgeted end of April balance

= 37,000 + 1,000 - 24,000

= $14,000

Interest = 14,000 * 12%/ 12 months

= $140

2. Financing effect:

= Amount borrowed + Interest

= 14,000 + 140

= $14,140

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Explanation:

The fact that both automobile makers incurs the same cost of $9,000 is just one of many factors to consider because the processes involved in manufacturing are not necessarily the same.

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It could also be that Sparrow Co. was able to achieve same level of cost with Bison Autos because it adopted modern cost reductions techniques such as Just-In Time which eliminates the need to keep inventory, thereby  eliminating excessive costs of holding inventory.

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Which terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?
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Agency problem  is the issue rises when the agents fails to display appropriate interest of principles.This interest conflict usually occurs between the organisation's stakeholder and management.

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The ________ is a rule that permits employees and union officials to engage in union solicitation on company property if the emp
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inaccessibility exception

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https://quizlet.com/205638479/b-law-ch-32-flash-cards/

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