operations today it could sell the inventory for $85,000 and the fixed assets for $349,000. The firm could collect 100 percent of its receivables as they are secured. What is the market value of the firm's assets?
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- Suppose that LilyMac Photography has annual sales of $230,000, cost of goods sold of $165,000, average inventories of $4,500, and average accounts receivable of $25,000. Assume that all of LilyMac's sales are on credit. What will be the firm's operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)Butler Corp. (BC) sells its stainless-steel products on terms of “2/10, net 40”. BC is considering granting credit to retailers with total assets as low as $400,000. Currently the lowest asset limit is $850,000. BC believes sales will increase $10 million from the new credit group but the average collection period for this new group will be 80 days versus the current average collection period of 30 days. If management estimates that 40% of the new customers will take the cash discount and 10% of the new business will be written off as bad-debt loss, should BC lower its credit standards? Assume BC’s variable cost ratio is 0.80 and its required pretax rate of return on current assets investment is 14%. BC also estimates that an additional investment in inventory of $750,000 is necessary for the anticipated sales increaseTommy Textiles Limited estimates that it takes the company 27 days on average to pay off its suppliers. It also knows that it has days sales in inventory of 64 days and days sales outstanding of 32 days. Which of the following is Tommy's cash conversion cycle? O a. 79 days O b. 49 days O c. 59 days O d. 69 days A Financial Analyst has recommended a $100 000 portfolio containing assets X, Y and Z. $20 000 will be invested in asset X, with a beta of 1.5; $50 000 will be invested in asset Y, with a beta of 2.0; and $30 000 will be invested in asset Z, with a beta of 0.5. The beta of the portfolio is: O a. 1.25 O b. 1.45 O c. 1.55 O d. 1.15
- Want to give you a correct answerLibscomb Technologies' annual sales are $6,750,624 and all sales are made on credit, it purchases $3,062,806 of materials each year (and this is its cost of goods sold). Libscomb also has $571,915 of inventory, $1,475,000 of accounts receivable, and $1,400,000 of accounts payable. Assume a 365 day year. What is Libscomb’s Receivables Period (in days)?Animal Kingdom is evaluating the extension of credit to a new grouo of customers. Although these customers will provide P240,000 in additional credit sales, 12% are likely to be uncollectible. The company will also incur P21,000 in additional collection expense. Production and marketing costs represent 72% of sales. The firm is in a 30% tax bracket and has a receivables turnover of six times. No other asset build up will be required to service the new customers. The firm has a 10% desired return on investment. Should it extend credit to these customers and should credit be extended if the receivables tumover drops to 1.5 and all other factors are the same? Can you please show me an explanation and a solution for this? Thank you so much!
- Gerard Appliances, Inc., is a small manufacturer of washing machines and dryers. It sells its products to large, established discount retailers that market the appliances under their own names. Gerard generally sells the appliances on trade credit terms of n/60, but if a customer wants a longer term, it will accept a note with a term of up to nine months. At present, the company is having cash flow troubles and needs $10 million immediately. Its Cash balance is $400,000, its Accounts Receivable balance is $4.6 million, and its Notes Receivable balance is $7.4 million. (a) How might Gerard Appliances use its accounts receivable and notes receivable to raise the cash it needs? (b) What are its prospects for raising the needed cash?A CARDBOARD BOX FACTORY pays its suppliers 40 days after making the purchase and receiving the goods. The average collection period is 45 days, i.e. its customers settle their debt with the company in that time; and the average inventory age is based on the inventory turnover which is 10 times a year. The company spends about $1.23 million in operating cycle investments. With this data we need to calculate: The operating cycle.The cash conversion cycle.The cash turnover.The minimum cash balance.You plan to make modifications to your policies so that you can decrease your PPC by 10 days, and decrease your EPI by 2 times (before converting it to days). Negotiations with your supplier have been unsuccessful and the payment term has been reduced by 10 days. With these data you have to calculate: Re-calculate the Operating Cycle, the SCC, RC and SMC introducing the proposed changes.Calculate the opportunity cost that the changes will cause, if the company's interest rate is 8%.A firm with sales of $10,000,000 has inventory of $800,000. The firm has no cash sales (all sales are on credit and are collected within 39 days). You are willing to sell inventory to the firm on credit provided that you will be paid within 90 days. Should you sell to this firm on credit? Assume there are 365 days in a year. (This question is more subtle than it appears. Think through all the given information.) Round your answer to the nearest whole number. On average, it will take you sell to the firm on credit. days to receive the payments, therefore, you -Select-
- Toy Kingdom is evaluating the extention of credit to a new group of customers. Although these customers will provide P240,000 in additional credit sales, 12% are likely to be uncollectible. The company will also incur P21,000 in additional collection expense. Production and marketing costs represent 72% of sales. The firm is in a 30% tax bracket and has a receivables turnover of six times. No other asset buildup will be required to service the new customers. The firm has a 10% desired return on investment a) Should it extend credit to these customers? b) Should credit be extended if the receivables turnover drops to 1.5 and all other factors are the same? Kindly help me to solve this, thanks!Suppose that Dunn Industries has annual sales of $2.3 million, cost of goods sold of $1,650,000, average inventories of $1,116,000, and average accounts receivable of $750,000. Assume that all of Dunn’s sales are on credit.What will be the firm’s operating cycle? (Use 365 days a year. Do not round intermediate calculations. Round your final answer to 2 decimal places.)Libscomb Technologies' annual sales are $5,790,872 and all sales are made on credit, it purchases $3,221,342 of materials each year (and this is its cost of goods sold). Libscomb also has $539,653 of inventory, $498,477 of accounts receivable, and $416,602 of accounts payable. Assume a 365 day year. What is Libscomb’s Inventory Period (in days)?