• ABC shop’s refrigeration capabilities allow the company to store fresh flowers for up to two weeks. Silk flowers, maki

[answerhappygod]

• ABC shop’s refrigeration capabilities allow the company to
store fresh
flowers for up to two weeks. Silk flowers, making up a smaller
portion of the
company’s business, are store indefinitely. ABC shop’s holding
period, the
time between buying and selling both types of flowers, average 40
days.
• Depending on how long ABC shop has been doing business with a
customer,
the company offers a range of credit terms from zero (cash on
delivery) to
30 days. ABC Shop’s average collection period, the time between
selling the
flowers and collecting cash from customers, is 20 days.
• ABC Shop’s fresh and silk flower suppliers offer credit terms of
10 to 40 days.
ABC shop’s average payment period, the time between receiving the
flowers
and paying for them, is 30 days.
If ABC’s shop approaches your lending institution for a loan to
cover its cash flow
timing difference, ask these questions:
1. Graph of ACB’s current operating cycle (2 points)
2. What would be the purpose of the loan? (1 point)
3. What would be the repayment source? (1 point)
4. What would be the loan term? (1 point)
5. What credit product would be suitable for ABC shop? (1
point)