1) Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4,770,000 to $5,870,000 as a result. Wontaby finances short-term assets at the bank at a cost of 12 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) 2) In 2008, Upper Crust had cash flows from investing activities of $235,000 and cash flows from financing activities of ?$153,000. The balance in the firm's cash account was $93,000 at the beginning of 2008 and $108,000 at the end of the year. What was Upper Crust's cash flow from operations for 2008? A. $108,000 B. $15,000 C. $388,000 D. $403,000
1) Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4,770,000 to $5,870,000 as a result. Wontaby finances short-term assets at the bank at a cost of 12 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) 2) In 2008, Upper Crust had cash flows from investing activities of $235,000 and cash flows from financing activities of ?$153,000. The balance in the firm's cash account was $93,000 at the beginning of 2008 and $108,000 at the end of the year. What was Upper Crust's cash flow from operations for 2008? A. $108,000 B. $15,000 C. $388,000 D. $403,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1)
Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4,770,000 to $5,870,000 as a result. Wontaby finances short-term assets at the bank at a cost of 12 percent annually.
Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.)
2)
In 2008, Upper Crust had cash flows from investing activities of $235,000 and cash flows from financing activities of ?$153,000. The balance in the firm's cash account was $93,000 at the beginning of 2008 and $108,000 at the end of the year. What was Upper Crust's cash flow from operations for 2008?
A. $108,000
B. $15,000
C. $388,000
D. $403,000
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