If a firm's sales are $1,680,000 and it costs 9 percent to carry current assets, what is the potential savings if management can increase inventory turnover from 2 to 4 times a year and increase receivables turnover from 5.0 to 6.5 times a year? Round your answer to the nearest dollar. $
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If a firm's sales are $1,680,000 and it costs 9 percent to carry current assets, what is the potential savings if management can increase inventory turnover from 2 to 4 times a year and increase receivables turnover from 5.0 to 6.5 times a year? Round your answer to the nearest dollar.
$
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- Need helpHow much value would be added to a firm that could permanently reduce its cash collection period by 2 days if daily collections average $10,000 and the opportunity cost is 5% annually?Sunny Manufacturing is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $220,000 if credit is extended to these new customers. Of the new accounts receivable generated, 10 percent will prove to be uncollectible. Additional collection costs will be 5 percent of sales, and production and selling costs will be 70 percent of sales. a. Compute the incremental income before taxes. $ Incremental income before taxes b. What will the firm's incremental return on sales be if these new credit customers are accepted? (Round the final answer to 2 decimal place.) Incremental return on sales % c. If the receivable turnover ratio is 4 to 1, and no other asset buildup is needed to serve the new customers, what will Sunny Manufacturing's incremental return on new average investment be? (Do round intermediate calculations. Round the final answer to the nearest whole percentage.) Incremental return on new average investment %
- Carla Vista Sales Company has sales of $1,250,000. If the company’s management expects sales to grow 4.50 percent annually, how long will it be before sales double? Use financial calculator to solve this problem. (Round answer to 0 decimal places, e.g. 20.) Time needed to double its salesThe sales director of ABC Corp suggest the following credit terms. He estimated the following:Sales will increase by at least 20%AR turnover will be reduced to 8 times from present turnover of 10 times.Bad debts will increase to 1.5%. Current bad debts are 1%.Current sales is P 900,000Variable cost ratio is 55%.Desired rate of return is 20%Fixed expenses is P 150,000What is the net advantage of changing the credit terms?Hurkin Manufacturing Company pays accounts payable on the tenth day after purchase. The average collection period is 30 days, and the average age of inventory is 40 days. The firm currently has annual sales of about $18 million and purchases of $14 million. The firm is considering a plan that would stretch its accounts payable by 20 days. If the firm pays 12% per year for its resource investment, what annual savings can it realize by this plan? Assume a 360- day year.
- a. what is the EOQ for a firm that sells 5,000 units when the cost of placing an order is $5 and the carrying cost are $3.50 per unit? b. how long will the EOQ last? how many orders are placed annually? c. as a result of lower interest rates, the finnancial manager determines the carrying cost are now $1.80 per unit. what are the new EOQ and annual number of objects?HelpProvide answer please
- You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of your product in the same amount of time. Thus, you forecast that total sales will increase next year by 25% over the current amount of 96,000 units. If your sales price is $19 per unit, what are the incremental revenues next year from the upgrade? The incremental revenues are $ (Round to the nearest dollar.)HS Shipping wants to expand as soon as it can save $112 million. Towards that goal, the firm started saving three years ago and currently has $38.2 million saved. Starting today, the firm will add $15,000 a month to this savings account. The rate of return is 7.1 percent, compounded monthly. How long will it be from now before the company can expand?You are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of $79,000 immediately. If your cost of capital is 7.2%, what is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV? The minimum dollar amount is $ (Round to the nearest dollar) COO
