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Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its

Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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4G 46 6:18 s J 0.60 31 Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its current level of nine times per year to a level of 12 times per year, its cost saving in the coming year are expected to be Your answer A firm has daily cash receipts of P300,000. A bank has offered to provide a lockbox service that will reduce the collection time by three days. The bank required a monthly fee of P2,000 for providing this service. If monthly rates are expected to average 6% during the year, what is the additional annual income (loss) of using the lockbox system? * Your answer
Transcribed Image Text:4G 46 6:18 s J 0.60 31 Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its current level of nine times per year to a level of 12 times per year, its cost saving in the coming year are expected to be Your answer A firm has daily cash receipts of P300,000. A bank has offered to provide a lockbox service that will reduce the collection time by three days. The bank required a monthly fee of P2,000 for providing this service. If monthly rates are expected to average 6% during the year, what is the additional annual income (loss) of using the lockbox system? * Your answer
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