ubmit written responses to these questions.
- In terms of cash flow, what are the stages of the working capital cycle?
- Describe the two components of a working capital management strategy.
- What are the two types of unsecured bank loans? Describe each.
- In the hospitalâ€™s billing process, why is medical records a critical department?
- Identify the alternatives for investing cash on a short-term basis, and discuss the general characteristics of each.
- List three ways to measure accounts receivable performance.
- Identify and define two methods to finance accounts receivable.
- Compute the annual approximate interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations?
- 2/10 net 20
- 2/10 net 30
- 2/10 net 40
- 2/10 net 50
- 2/10 net 60
On January 2, 20X1, City Hospital established a line of credit with First Union National Bank. The terms of the line of credit called for a $200,000 maximum loan with an interest of 11 percent. Then compensating balance requirement is 15 percent of the total line of credit (with no additional fees charged).
- What is the effective interest rate for City Hospital if 50 percent of the total amount was used during the year?
- How would the answer to part A change if the additional fees were $500?
- How would the answer to part A change if the additional fees were $1,000?