ur company received a $9 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $3 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $6 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on the above information; a. No option is correct b. Your earnings did not change c. Your earnings went up by $9 million d. Your earnings went up by $6 million
ur company received a $9 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $3 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $6 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on the above information; a. No option is correct b. Your earnings did not change c. Your earnings went up by $9 million d. Your earnings went up by $6 million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Your company received a $9 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $3 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $6 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes).
Based on the above information;
a.
No option is correct
b.
Your earnings did not change
c.
Your earnings went up by $9 million
d.
Your earnings went up by $6 million
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