Suppose your firm receives a $4.06 million order on the last day of the year. You fill the order with $2.07 million worth of inventory. The customer picks up the entire order the same day and pays $1.24 million up front in cash; you also issue a billfor the customer to pay the remaining balance of $2.82 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following:d. Inventorye. Casha. Revenuesb. Earningsc. Receivablesa. RevenuesRevenues will increase by $million. (Select from the drop-down menu and round to two decimal places.)b. EarningsEarnings will increase by $million. (Select from the drop-down menu and round to two decimal places.)c. ReceivablesReceivables will increase by $million. (Select from the drop-down menu and round to two decimal places.)d. InventoryInventory will decrease by $million. (Select from the drop-down menu and round to two decimal places.)e. CashCash will increase by $million. (Select from the drop-down menu and round to two decimal places.)

Receives order of $4.06 million Filled order with inventory = $2.07 Million Cash received = $1.24…

Suppose your firm receives a $4.06 million order on the last day of the year. You fill the order with $2.07 million worth of inventory. The customer picks up the entire order the same day and pays $1.24 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $2.82 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following: a. Revenues b. Earnings c. Receivables d. Inventory e. Cash

Suppose your firm receives a $4.06 million order on the last day of the year. You fill the order with $2.07 million worth of inventory. The customer picks up the entire order the same day and pays $1.24 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $2.82 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following: a. Revenues b. Earnings c. Receivables d. Inventory e. Cash

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 9MC: Now assume that it is several years later. The brothers are concerned about the firm’s current...

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