Preview

Julian Eastheimer & Co

Good Essays
Open Document
Open Document
1169 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Julian Eastheimer & Co
Case 2 - Financing Alternatives - Rationale
1) Boudior's Inc - Leasing Arrangement - they cannot use their real estate to acquire loan since it is already under mortage - same with inventory which is already under chattel mortgage - they can negotiate for a lease-to-own arrangement
"wikipedia"
These contracts are commonly used where a buyer wants to purchase a home, or building but due to credit issues would not qualify for a conventional mortgage and does not wish to, or would not qualify, for other financing. A lease-to-own purchase (also "rent-to-own purchase" or "lease purchase") is a lease combined with an option to purchase the property within a specified period, usually 3 years or less, at an agreed-upon price. The borrower pays an option fee, 1% to 5% of the price, which is credited to the purchase price. The borrower pays rent, and an additional rent premium that is also credited to the purchase price. If the purchase option is not exercised, the buyer loses both the option fee and the rent premium. 2) Timberland Power & Light - Long Term Bonds $900 m long term debt = 60% $75 m preferred stock = 5% $ 525 m common equity = 35% ttl current asset = $ 1.5b According to SEC, the holding company can have a long term debt fro 45% to 65% - adding 37m in debt by issuing long term bonds will result to $937 m long term debt = 61% $75 m preferred stock = 5% $ 525 m common equity = 34% - still within the acceptable range of SEC 3) Ripe and Fresh Canning Company - Factoring (Selling of the Firms Accounts Receivable) - Converting invoices to cash - instead of them having to collect cash after 60-day period, they can sell it to a factoring company at say 95% of the face value -Borrowing money, secured by your debt - their bank lends them the money,

You May Also Find These Documents Helpful

  • Satisfactory Essays

    The Dodd-Frank Reform

    • 348 Words
    • 2 Pages

    The actual default rate is between 3 and 4 percent. This is because Customers must have checking accounts and must have their pay or benefits check directly deposited into that account. The maximum loan term is 30 days and the maximum loan amount is usually $500. If the direct deposits are not sufficient to repay the loan within 35 days, the bank withdraws the money from the customer’s account even if it overdraws the account, which will also trigger more fees that the borrower must pay.…

    • 348 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Debt Persuasive Speech

    • 626 Words
    • 3 Pages

    The minimum payment is usually 2 or 3 percent of what you owe and when you are only paying that small of an amount, most of it is going towards the interest.…

    • 626 Words
    • 3 Pages
    Good Essays
  • Good Essays

    and then pay off the lender, with a 22.5 percent interest rate. In many cases,…

    • 1375 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Kendall Square Research Corporation is a technology company that has recently been scrutinized for its liberal revenue recognition policies. Currently this company recognizes revenue on product sales upon written acceptance of the product. However, acceptance typically occurs prior to the configuration of a particular system being finalized or payment being received from the customer.…

    • 490 Words
    • 2 Pages
    Good Essays
  • Better Essays

    Lease Memo

    • 1136 Words
    • 5 Pages

    Each year the number of leasing agreements continues to grow. There are several advantages of leasing property instead of owning. The company is protected against obsolescence and can receive 100% financing with less cost, fixed payments, and more flexibility (Schroeder, Clark, & Cathey, 2011). The new business opportunity for the client will require 20 more trucks than XYZ Trucking Inc. currently owns. The FASB issued SFAS No. 13, “Accounting for Leases” to establish standards of financial accounting and reporting for the lessees and lessors. The three leasing options to available are operating, sales-type, and direct financing. This memo will define each option, compare operating versus capitalizing and give a recommendation for XYZ Company.…

    • 1136 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Alexander and Thurston, Inc. is a mail sorting equipment company providing high quality service to their customers. The increasing pressure to live up to the service contracts let company start to rethink about their current inventory control strategy from both their distribution center (DC) and facility. The challenge of this company is to reduce their inventory level while maintaining the high fill rate and further improving their service level.…

    • 295 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Eligible tenants pay 30% to 40% of their adjusted monthly income toward the rent and utilities. As an example, a family who earns $600 per month might pay about $180.The City (using money appropriated by the U.S. Department of Housing and…

    • 842 Words
    • 4 Pages
    Good Essays
  • Good Essays

    515 Week 3 Hw

    • 525 Words
    • 3 Pages

    30% Debt; 5% Preferred Stock; 65% Equity; rd = 6%; T = 40%; rps = 5.8%; rs = 12%.…

    • 525 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Walnut and associates

    • 775 Words
    • 4 Pages

    Q1) What factors should Mr. McClintock consider in deciding whether or not to adopt the level…

    • 775 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Homework help

    • 383 Words
    • 2 Pages

    Weekly tasks or assignments (Individual or Group Projects) will be due by Monday and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.…

    • 383 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    they had not foreclosed. Even thought the government came out with programs to try and keep…

    • 856 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Pro Forma Chapter 4

    • 1294 Words
    • 6 Pages

    Assuming costs vary with sales and a 20 percent increase in sales, the pro forma income statement will look like this:…

    • 1294 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Eastern Waves, Inc.

    • 1404 Words
    • 6 Pages

    This assignment is being submitted on February 1st, 2013, for Dr. Mello’s 4123 MKTG: Organizational Purchasing course.…

    • 1404 Words
    • 6 Pages
    Good Essays
  • Better Essays

    Contract Breach

    • 1284 Words
    • 6 Pages

    Uher, T., Davenport, D. (2009, Ch.8, pg.165) Fundamentals of Building Contract Management (2nd Edition), UNSW Press, Sydney, NSW, AUS.…

    • 1284 Words
    • 6 Pages
    Better Essays
  • Good Essays

    John Crane Ltd

    • 450 Words
    • 2 Pages

    Crane Packing Company, a manufacturer of mechanical seals, is debating on whether to allow the floor operators to write CAM part-programs on the floor of the shop while the machines need to be used. This dilemma is relevant because, although the work would, in theory, be more efficient if there was standardized programming for the machines, the lack of differentiation could cause a few problems. However, this problem is predominantly caused from personal pride of employees. In order to continue to grow and dominate the market, we must stop allowing programming to be made, in most cases, on the floor and have a more standardized version that is developed beforehand to use. This would save money and increase productivity.…

    • 450 Words
    • 2 Pages
    Good Essays

Related Topics