The Branson Corporation is considering a change in its cash-only policy. The new termswould be net one period. The required return is 2 percent per period.Price per unitCost per unitUnit sales per monthCurrentNewPolicyPolicy$53$55$31$312,150?What is the break-even quantity for the new credit policy? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)Answer is complete but not entirely correct.Break-even quantity144.84

To find the break-even quantity for Branson Corporation under the new credit policy, we need to…

Answered: The Branson Corporation is considering…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 10QTD

See similar textbooks

Similar questions

The Branson Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 1.5 percent per period. Price per unit Cost per unit Unit sales per month Current Policy $59 $33 2,450 NPV New Policy $61 $33 2,575 Calculate the NPV of the decision to change credit policies. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
[Question text] Syarikat Sinergi is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit for one period or net 30. Based on the following information, determine if the switch is advisable. The interest rate is 2.5% per period. CURRENT POLICY NEW POLICY Price per unit RM175 RM175 Cost per unit RM130 RM130 Sales per period in units 1.000 1,100 Select one: A. Yes, the switch should be made because the NPV is RM8,000. B. No, the switch should not be made because the NPV is -RM4,500. C. Yes, the switch should be made because the NPV is RM4,500. D. No, the switch should not be made because the NPV is -RM8,000.
3. Answer the following questions based on the information below Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 10 12 Variable cost per unit (RO) 4 Quantity 100,000 150,000 Monthly rate 2% What is the incremental cash flows from switching credit policies? a. b. What is the cost of switching? c. What is your recommendation?
None
Need help on these questions please
Simmons Corporation can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 2.5/18, net 55. a. Compute the cost of not taking the cash discount. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places. Cost of not taking a cash discount b. Should the firm borrow the funds? O No O Yes %
What’s the equivalent interest rate to the terms 3/20, n/60? In other words, what is the effective annual rate that is "given" to a customer for this cash discount? (Use 365 days.) HINT: Use the I = P x R x T formula where R = I/PT and choose some value for the gross amount of the invoice (i.e $1,000). Label (%) and round to the nearest whole percent.
N5. Account
A company is planning to expand its business is costing OMR 21756. The following cash inflows are expected. Calculate Profitability index given the rate of discounting to be 3.008% Machine A Years 12960 1 13300 2 12500 14500 4 اخترأحد الخيارات a. 27675.7870 b. 0.440 c. none of the options O d. 2.289 O e. 2.272 O 3.
Suppose you are offered $7,100 today but must make the following payments: 1 2 Cash Flows ($) O $7,100 1-3,800 2-2,500 3 -1,600 4 -1,400 Year 4 6. 7 9. 10 11 What is the IRR of this offer? (Do not round intermediate calculations. Enter your ans 12 a. 13 14 15 16 17 b. If the appropriate discount rate is 10 percent, should you accept this offer? 18 19 multiple choice 1 20 21 Reject Ассept 22 23 24 25 C. If the appropriate discount rate is 19 percent, should you accept this offer? 26 27 multiple choice 2 28 29 Аcсept Reject 30 31 32 33 What is the NPV of the offer if the appropriate discount rate is 10 percent? (A negative ar What is the NPV of the offer if the appropriate discount rate is 19 percent? (A negative ar 34 d-1. 35 d-2. 36
me conventional paypack periva ignores une une value vi muncy, and this concerns Cold Goose Chv. He has now asked you to compute Dela discounted payback period, assuming the company has a 7% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to the nearest two decimal places. For full credit, complete the entire table. (Note: If your answer is negative use a minus sign.) Cash flow Discounted cash flow Cumulative discounted cash flow Discounted payback period: The discounted payback period The regular payback period $6,168,764 Year 0 -$6,000,000 -$6,000,000 -$6,000,000 $1,714,226 $3,957,217 years $2,411,755 $ IMI Year 1 $2,400,000 Which version of a project's payback period should the CFO use when evaluating Project Beta, given its theoretical superiority? $ $ One theoretical disadvantage of both payback methods-compared to the net present value…
es Little Kimi Clothiers can borrow from its bank at 20 percent to take a cash discount. The terms of the cash discount are 3/25 net 85. a. Compute the cost of not taking the cash discount. (Use 365 days in a year. Do not round the intermediate calculations. Round the final answer to 2 decimal places.) Cost of not taking a cash discount b. Should the firm borrow the funds? % 00 Yes O No

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS