Sixty percent of Jesse's annual sales of P900,000 is on credit. If its year-end receivables turnover is 4.5, what is the average collection period and the year- end receivables, respectively (assume a 365-day year)? Select the correct response: 73 days and P108,000. 81 days and P200,000. O 73 days and P120,000. 81 days and P120,000.

Sixty percent of Jesse's annual sales of P900,000 is on credit. If its year-end receivables turnover is 4.5, what is the average collection period and the year- end receivables, respectively (assume a 365-day year)? Select the correct response: 73 days and P108,000. 81 days and P200,000. O 73 days and P120,000. 81 days and P120,000.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Zane Corporation has an inventory conversion period of 76 days, an average collection period of 35 days, and a payables deferral period of 20 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places.days If Zane's annual sales are $2,030,230 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent.$ How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.x
Company is contemplating factoring its accounts receivable. The factor will acquire P250,000 of the company’s accounts receivable every 2 months. An advance of 75 percent is given by the factor on receivables at an annual charge of 18 percent. There is a 2 percent factor fee associated with receivables purchased. What is the cost of the factoring arrangement? choose the letter of the correct answera. P30,000.00b. P33,750.00c. P63,750.00d. P103,000.00e. P125,000.00
Medwig Corporation has a DSO of 17 days. The company averages $8,500 in sales each day (all customers take credit). What is the company's average accounts receivable? Assume a 365-day year. Round your answer to the nearest dollar.
Medwig Corporation has a DSO of 32 days. The company averages $8,000 in sales each day (all customers take credit). What is the company's average accounts receivable? Assume a 365-day year. Round your answer to the nearest dollar.
Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to P450,000 per year. On average, how much “free" trade credit does the firm receive during the year? (Assume a 365-day year, and note that purchases are net of discounts.) * O P19,418 P20,389 P21,408 P22,479 P18,493
Accounts receivable are P30,000 and the turnover rate is 24 times a year. As turnover rate of 18 times in one year is desired to increase by 25 %. The estimated accounts receivable to be maintained would be P
Bluewater, Inc. has the following estimated quarterly sales for next year. The accounts receivable period is 60 days. What is the expected accounts receivable balance to the nearest dollar at the end of the third quarter? Assume that each month has 30 days. Q2 Q3 Q4 $1,300 $1,425 $2,200 Ⓒa. $800 b. $367 c. $950 d. $733 Qe. $867 Q1 Sales $1,850
MRK corporation has a DSO of 35 days. The company's annual credit sales are $10 million. What is the level of its accounts receivable? Assume there are 365 days in a year.? Group of answer choices $350 million $958, 904 $400 million $1,369, 863
The AR Company had sales of $5 million in 1991. It is estimated that 80% of all sales are on credit. a. If the balance in accounts receivable at the end of 1991 was $500,000 and $750 million , how long did it take AR’s customers to pay? b. Suppose AR extends credit to customers on the basis of 2/10, net 30. How does the actual time it takes customers to pay compare with these credit terms if the accounts receivable balance is $500,000? if the accounts receivable balance is $750? c. Critique the use of the number of days credit to evaluate AR’s collections.
cool security systems has $37,500 line of credit , which charges an annual percentage rate of prime rate plus 4%. The starting balance on October 1 was $9,300. on October 4 they made a payment of $1,200. On October 13 the business borrowed $2,500 , and on October 19 they borrowed $4,200. If the current prime rate is 6% , what is the new balance (in $)? (Round your answer to the nearest cent.)
ngram Office Supplies, Inc., buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $675,000 per year. On average, what is the dollar amount of costly trade credit (total credit – free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.) Do not round intermediate calculations. $56,959 $64,726 $78,318 $59,548 $53,723
ABC has a major supplier that offers a credit term of 2/15, n/45. Cash not yet used for payments are generally kept in an account that earns ABC 2.5% per year. Use 360 days in a year. Compute for the following: 1. Simple annual effective cost of paying on 45th day instead of the 15th day. 2. Compounded annual effective cost of paying on 45th day instead of the 15th day. Please create a detailed solution for the two questions. Thank you

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