Part A Cash Flow of Accounts ReceivableMyers and Associates
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Part A: Cash Flow of Accounts ReceivableMyers and Associates, a famous law office in California, bills its clients on the first of each month. Clients pay in the following fashion:40% pay at the end of the first month, 5% pay at the end of the fourth month, 5% default on their bills. Myers wants to know the anticipated cash flow fro the first quarter of 2009 if the past billings follow this same pattern. The actual and anticipated billings are as follows. Fourth Quarter Actual Billings: Oct. $392,000, Nov. $323,000, Dec. $296,000First Quarter Anticipated Billings: Jan. $340,000, Feb. $360,000, Mar. $408,000Part B: Straight Bank Loan Right Bank offers EAR loans of 9.38% and requires a monthly payment on all loans?a. What is the APR for these monthly loans?b. What is the monthly payment for the following?1.A loan of $200,000 for six years 2. A loan for $450,000 for twelve years 3. A loan for $1,250,000 for thirty yearsPart C: Selling BondsAstro Investment Bank has the following bond deals under way:Company Bond Yield Commission Coupon Rate MaturityGravity Belts 8.0% 2%of sale price 8.0% 10 yearsInvisible Rays 9.0% 3%of sale price 12.0% 10 yearsSolar Glasses 7.0% 2%of sale price 5.0% 20 yearsSpace Chips 12.0% 4%of sale price 0% 20 years
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