Jude Corp. has annual sales of P50,735,000, an average inventory level of P15,012,000, and average accounts receivable of P10,008.000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by P1,946,000 and accounts receivable by P1,946,000. What will be the net change in the cash conversion cycle, assuming a 365-day year? O -40.5 days -36.4 days O -26.6 days O :32.8 days
Q: You deposit $100, $150, & $200 in a bank account at the end of years 1,2,& 3 and earn 7% interest.…
A: Solution:- Present value means value in today’s terms by discounting it back at the given interest…
Q: Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense…
A: The contribution format income statement: The contribution format income statement is a tool in…
Q: a coupon of 6.6 percent, a YTM of 8.35 percent, and also has 15 years to maturity. If interest rates…
A: Bond Price: It is computed by discounting all the coupon payments and the par value of the bond by…
Q: Sunburn Sunscreen has a zero coupon bond issue outstanding with a $20,000 face value that matures in…
A: Here, To Find: Market value of Equity and Debt =?
Q: An individual accident and health insurance policy must include O A. An automatic reinstatement…
A: In some form, every state in the US has passed the Uniform Individual Accident and Sickness Policy…
Q: The account balance is approximately $. Simplify your answer. Type an integer or decimal rounded to…
A: Here we will use the concept of compounding. When determining the future value of a cash flow we do…
Q: A Treasury bond that settles on August 10, 2019, matures on July 19, 2026. The coupon rate is 6.6…
A: Yield to maturity refers to the total return generated by a bond until maturity. It is used by…
Q: what factors aided rockwater in it's smooth switch to the balanced scorecard
A: In finance balanced scorecard is often used as a performance measurement system. It includes…
Q: (a). Using the net present value method, which project should be accepted? (b). Using the internal…
A: NPV = -Initial outlay + Present value of cash flows. IRR is the internal rate of return at which the…
Q: Which of the following are consistent with the efficient market hypothesis? Check all that apply.…
A: Since you have posted a question with multiple questions, we will solve the first one for you. If…
Q: The market price of a stock is $35.00. An investor has purchased a call option for 100 shares of…
A: Price of underlying asset = $35 Exercise price = $20 Number of shares = 100 Intrinsic value of the…
Q: how was the trading of FORD company in march 2022?
A: Buying and selling financial assets is known as financial trading. It can be done through an…
Q: How much will $100 buy you in 20 years?
A: Inflation: It represents the increase in the prices of the cost of living for a period of time. It…
Q: [CLO-1] The options for investing money are represented as the following: 1. 5% APR compounded…
A: Effective Annual Interest Rate(EAR)refers to the real rate of return that we earn on our savings or…
Q: Zach depsoits a $38,000 one-time lump sum in an account with an APR of 7% that is compounded…
A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…
Q: how was capital asset pricing model (CAPM) created? GIVE reference
A: Meaning CAPM Capital asset pricing model, It is created to explain the investor that he/she will get…
Q: Suppose the current exchange rate is $1.77/E, the interest rate in the United States is 5.08%, the…
A: Here, To Find: Part a. Forward Exchange rate =? Part b. d1 and N1 =? Part c. d2 and N2 =? Part d.…
Q: Suppose you decide to take out the $1 million 30-year fixed rate mortgage at 4%. a) How much…
A: Mortgage loans are paid by the equal monthly payments these carry the payment of loan amount also…
Q: in profit oon vou oarn on $10 500 utilizing covered interest arbitrage?
A: given r c = 4.57% r u = 2.73% arbitrage profit = amount *can/$ *(1+r c)/forward rate -(amount…
Q: Find the amount of time to the nearest day it would take a deposit of $2600 to grow to $1 million at…
A: When a person invest a sum of money, interest is earned on the investment. Interest can be defined…
Q: What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds?…
A: Current ratio is an important financial metric. It is a liquidity ratio that measures a company’s…
Q: Maria has extra money, and she is planning to buy certain income-earning assets to help her earn…
A: A person with extra money can invest that money in different financial assets and securities. Each…
Q: Which of the following statements is not true about small-cap mutual funds? Small-cap funds derive…
A: Small-cap mutual funds can be defined as those mutual funds which are invested in smaller companies…
Q: You are analyzing HUE stock. You expect that the dividends over the next three years will be $1.75…
A: Since you have posted multiple questions we shall be solving the first one for you as per our…
Q: 8. Suppose a certain bond sold a volume of 2, 375, 000. If the bonds sold for $824.99, calculate the…
A: Given, Meaning of bond, Its an instrument of debt which is floated by the company so that the…
Q: Answer true or false to the following statement and explain: “Investors engage in forward exchange…
A: The exchanging of one currency for another is known as Foreign Exchange (forex or FX). For example,…
Q: (Click here to see present value and future A. If the discount rate is 15%, compute th decimal…
A: NPV= Present value of cashinflows - Present value of cashoutflows
Q: 16. You are considering an investment with the following cash flows: Year Cash Flow 0…
A: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000
Q: Elaborate about The duty to not misrepresent.
A: A obligation is a promise or expectation to do something in general or in specific situations. In an…
Q: The following information related to the Postretirement Benefits (health) for the Union Company on…
A: Here, To Find: Part a. Calculate the EPBO at end of 2021 =? Part b. Calculate accumulated…
Q: At an effective annual interest rate of 10 percent, how many years will it take a given amount to…
A: Effective annual interest rate (r) = 10% Future value factor required (FVF) = 3 Period = n
Q: Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not?…
A: FP&A (financial planning and analysis) is an important domain of finance. The activities of…
Q: ars, what will their payment and the total cost of their loan be?
A: Loan Amount: It refers to the amount borrowed by the borrower from the bank. The borrower pays the…
Q: Q1: Below is the population of the city in lenses taken once every 10 years. Estimated population in…
A: Solution:- Estimated population can be computed through using constant annual growth rate. We know,…
Q: If the cost of capital is 12%, how much should the company set aside on an annual basis II they…
A: Sinking funds are periodic payments done so that they are equivalent to future requirements of money…
Q: What kinds of expenses do mutual funds incur? How are expense ratios calculated?
A: Mutual funds are referred to as the investment vehicle which provides access to investors to…
Q: A corporation uses the indirect method of preparing the statement of cash flows. A fixed asset has…
A: Solution:- Cash flow statement is that part of financial statements that represents the total net…
Q: Mark Goldsmith’s broker has shown him two bonds issued by different companies. Each has a maturity…
A: Mark will receive principal amount of $1,000 at the end of 5 years. Coupon every year = 1000*0.06324…
Q: Service Income, Customer 1-P50,000.00 Salaries Paid to Clerk – P5,000.00 Rent Expense - P3,000.00…
A: Total Expenses = Salaries paid to clerk + Utilities Expense + Rent Expense + Salaries paid to…
Q: D4) Real options make up a lower proportion of the total value of ”value stocks” than “growth…
A: Stock options are financial products that are based on the value of the underlying security.…
Q: The following information relates to the Maxwell Company for 2020: Gain on sale of land $800 Bond…
A: Cash flow from operating activities consists of cash inflows and cash outflows from day to day…
Q: iscuss the Nextera Energy major sources and uses of funding
A: Nextera Energy is an electric power and energy infrastructure company in North America. It is one of…
Q: 12. Consider a 25-year 6% bond selling at $70.357 with a par value of $100 to yield 9%. Using…
A: Absolute estimation error is the percentage error, which is simply difference between the two values…
Q: The market price of a stock is $35.00. An investor has purchased a call option for 100 shares of…
A: Market price of stock = $35.00 Exercise price = $20.00 Size of contract = 100 Shares Intrinsic value…
Q: How well do portfolio theory and capital market theory work for commercial real estate? Explain.
A: Modern portfolio theory, often known as mean-variance analysis, is a mathematical framework for…
Q: best 20 US penny stock for 2022?
A: Penny stock - Share of a small public company that trade at a low price is referred to as penny…
Q: Current assets minus current llabilities Is: Multiple Cholce Working capital. Financial leverage.…
A: Current assets means cash and cash equivalent and other assets which are realisable with in normal…
Q: ercise 11-7 (Algo) Net present value and unequal cash flows LO P3 hez is considering a $210,000…
A: Net present value is difference between present value of cash flow and initial investment and should…
Q: The firm's average accounts receivable balance is P2.5 million, and they are financed by a bank loan…
A: In finance the lockbox system is a service that many banks provide. It is related to receipt of…
Q: Martinez Co. borrowed $71,059 on March 1 of the current year by signing a 60-day, 5%, interest-…
A: Solution:- Interest bearing note is a short term source of finance, from which funds are raised for…
Step by step
Solved in 2 steps with 2 images
- Jude Corp. has annual sales of P50,735,000, an average inventory level of P15,012,000, and average accounts receivable of P10,008,000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by P1,946,000 and accounts receivable by P1,946,000. What will be the net change in the cash conversion cycle, assuming a 365-day year?-32.8 days-29.5 days-26.6 days-40.5 days-36.4 daysRoton Inc. purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $525,000 per year. What is the maximum dollar amount of costly trade credit the firm could get, assuming it abides by the supplier's credit terms? (Assume a 365-day year.) Do not round intermediate calculations. Select one:The Zocco Corporation has an inventory conversion period of 60 days, an average of collection period of 38 days, and a payable deferral period of 30 days. Assume that cost of goods sold 75% of sales. a. What is the length of the firm’s cash conversion cycle? a. Zocco’s annual sales are $3,421,875 and all sales are on credit, what is the firm’s investment in accounts receivable? b. How many times per year does Zocco turn over its inventory?
- Libscomb Technologies' annual sales are $6,615,140 and all sales are made on credit, it purchases $4,071,988 of materials each year (and this is its cost of goods sold). Libscomb also has $553,442 of inventory, $521,646 of accounts receivable, and beginning and ending of year $448,048 and $420,069 accounts payables (respectively). Assume a 365 day year. What is Libscomb’s Cash Cycle (in days)?Paul & Griffon manufactures and markets many products you use every day. In 2016, sales for the company were $93,000 (all amounts in millions). The annual report did not report the amount of credit sales, so we will assume that all sales were on credit. The average gross profit percentage was 51.2 percent. Account balances for the year follow: ts Beginning Ending Accounts receivable ЕВook $5,300 $5,700 (net) Inventory 6,080 6,100 Hint Required: Print 1. Compute the following turnover ratios. 2. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory. ferences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the following turnover ratios. (Do not round intermediate calculations. Round your final answers to 1 decimal place.) Receivables Turnover Ratio Inventory Turnover Ratio 00Fedex Ltd is a manufacturer that makes all sales on a 30-day credit terms. Annual sales are approximately $65 million. At the end of 2014 accounts receivable were presented in the company’s Balance Sheet as below: Accounts Receivable $5,350,000 Less: Allowance for Doubtful accounts $90,000 During 2015, $740,000 in accounts receivable were written off as uncollectible. Of these amounts written off, receivables totalling $34,000 were unexpectedly collected. At the end of 2015, an ageing of accounts receivable indicated a need for an $80,000 allowance to cover possible failure to collect the accounts currently outstanding. Fedex Ltd makes adjusting entries in its accounting records only at year-end. Required: Explain the difference between making an allowance for bad debts and writing off bad debt. Explain how each case is treated and shown in accounting. Prepare one journal entry to summarize…
- McDowell Industries sells on terms of 3/10, net 30. All sales for the year are on credit amount to Ksh 912,500,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. a. What is the days’ sales outstanding? b. What is the average amount of receivables? c. What is the percentage cost of trade credit to customers who take the discount? d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days? e. What would happen to McDowell’s accounts receivable if it toughened up on its collection policy with the result that all non-discount customers paid on the 30th day?In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ's average accounts receivable balance in 2015 was $35 million, and their average accounts payable balance was $10 million. The terms that XYZ receives on trade credit from its suppliers are 3/20, net 30. Is XYZ managing its accounts payable well? Why/why not? No, because they are paying their suppliers too late No, because they are paying their suppliers too early Yes, because they are strategically stretching their bills past the due date Yes, because they are paying their suppliers on the last day to get the discountYou prefer to extend credit on the assumption that you will be paid in full within 42 days of the sales. Firm X has average inventory of $640,000 with all cash sales (no credit sales) of $5,300,000. If you extend credit to this firm, can you expect to be paid on time? Assume 365 days in a year. Round your answer to the nearest whole number. The inventory turnover is days, therefore, you -Select- expect to be paid in 42 days.
- In 2015, XYZ Corp. had an annual cost of goods sold of $365 million. XYZ’s average accounts receivable balance in 2015 was $35 million, and their average accounts payable balance was $10 million. The terms that XYZ receives on trade credit from its suppliers are 3/20, net 30. Is XYZ managing its accounts payable well? Why/why not? No, because they are paying their suppliers too late Yes, because they are paying their suppliers on the last day to get the discount Yes, because they are strategically stretching their bills past the due date No, because they are paying their suppliers too earlyMcDowell Industries sells on terms of 3/10, net 30. All sales for the year are on credit amount to Ksh 912,500,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. a. What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days? b. What would happen to McDowell’s accounts receivable if it toughened up on its collection policy with the result that all non-discount customers paid on the 30th day?Vanity Press, Inc., has annual credit sales of $1.9 million and a gross profit margin of 35 percent. Round your answers to the nearest dollar. If the firm wishes to maintain an average collection period of 60 days, what level of accounts receivable should it carry? (Assume a 365-day year.) $ The inventory turnover for this industry averages seven times. If all of Vanity’s sales are on credit, what average level of inventory should the firm maintain to achieve the same inventory turnover figure as the industry? $