Charmin Paper Company

 

Charmin Paper Company sells to the 12 accounts listed below.

                   

        

                

A 

28        

B 

43        

C 

10        

D 20,00052        E 

42        

F 

34        

G 

16        

H 

65        

I 

33        

J 

50        

K 

14        

L 60,00035        

                      

Account	Receivable Balance Outstanding	Average of the Account over the Last Year
$ Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	60,000
1	20,000
70,000
50,000
220,000
30,000
300,000
40,000
90,000
210,000
Capital 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 acceptable accounts for a loan. The current prime rate is 8.5 percent, and Capital charges 3.5 percent over prime to Charmin as its annual loan rate.
a. Determine the maximum loan for which Charmin Paper Company could qualify.
b. Determine how much one month’s interest expense would be on the loan balance determined in part a.