The company has $325,000 in cash, $520,000 in accounts receivable, and $310,000 in accounts payable. It has a $16,250,000 bank loan at 6% interest and a $500,000 line of credit available at 9% interest. The company collects receivables within 30 days, pays payables within 60 days, and makes 80% of sales on credit at a 25% income tax rate.
The company has $325,000 in cash, $520,000 in accounts receivable, and $310,000 in accounts payable. It has a $16,250,000 bank loan at 6% interest and a $500,000 line of credit available at 9% interest. The company collects receivables within 30 days, pays payables within 60 days, and makes 80% of sales on credit at a 25% income tax rate.
The company has $325,000 in cash, $520,000 in accounts receivable, and $310,000 in accounts payable. It has a $16,250,000 bank loan at 6% interest and a $500,000 line of credit available at 9% interest. The company collects receivables within 30 days, pays payables within 60 days, and makes 80% of sales on credit at a 25% income tax rate.
Accounts Payable 310,000 Accounts Receivable 520,000 FF&E replacement reserve fund 500,000 Bank loan outstanding 16,250,000 Line of credit available for operations 500,000
Bank interest rate on cash on deposit 3%
Interest rate on bank loan 6% Interest rate on line of credit in use 9% Accounts Receivable collected in 30 Days Accounts Payable paid in 60 Days Amount of sales made with credit and credit cards 80% Amount of sales made with cash 20% Income tax rate 25%