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university of southern california Operations And Supply Chain Management Assignment Help - Raymond Manufacturing

Question - Raymond Manufacturing faces a liquidity crisis—it needs a loan of $100,000 for 1 month. Having no
source of additional unsecured borrowing, the firm must find a secured short-term lender. The firm’s
accounts receivable are quite low, but its inventory is considered liquid and reasonably good
collateral. The book value of the inventory is $300,000, of which $120,000 is finished goods. (Note:
Assume a 365-day year.)
(1) City-Wide Bank will make a $100,000 trust receipt loan against the finished goods inventory. The
annual interest rate on the loan is 12% on the outstanding loan balance plus a 0.25% administration
fee levied against the $100,000 initial loan amount. Because it will be liquidated as inventory is sold,
the ...Read More

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