FOUNDATIONS OF FINANCE-MYFINANCELAB
10th Edition
ISBN: 9780135160619
Author: KEOWN
Publisher: PEARSON
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Question
Chapter 14, Problem 1RQ
Summary Introduction
To discuss: Effect of seasonal changes on delivery business while
Expert Solution & Answer
Explanation of Solution
During the holiday seasons, the delivery volumes tend to peak.
Company U needs investment in working capital in order to operate its operations. It requires increased storage space, vehicles for distribution, and criteria for temporary staffing. Such factors lead to an increase in working capital requirement.
The peak season has to be accounted for when forecasting the financing requirements of the company so that there is no disruption in the business and deliveries are completed on time. In particular, the following factors must be taken into account in the forecast:
- Increase in staff: Temporary staff can be recruited during peak season, which raises wage expense.
- Increased storage space: Increases the cost of rent.
- Increase in delivery vehicles: These can be rented, which increases the cost of operations.
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Students have asked these similar questions
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Question 25
Jasmine bought a house for $225 000. She already knows that for the first $200 000, the land
transfer tax will cost $1650.
Calculate the total land transfer tax. (2 marks)
Land Transfer Tax Table
Value of Property
Rate
On the first $30 000
0%
On the next $60 000
0.5%
(i.e., $30 001 to $90 000)
On the next $60 000
1.0%
(i.e., $90 001 to $150 000)
On the next $50 000
1.5%
(i.e., $150 001 to $200 000)
On amounts in excess of $200 000
2.0%
22 5000–200 000.
10
825000
2.5000.00 2 x 25000
=8500
2 ma
Chapter 14 Solutions
FOUNDATIONS OF FINANCE-MYFINANCELAB
Ch. 14 - Prob. 1RQCh. 14 - Discuss the shortcomings of the percent of sales...Ch. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 1SPCh. 14 - Prob. 2SPCh. 14 - (Financial forecastingdiscretionary financing...Ch. 14 - (Financial forecastingpercent of sales) Next years...Ch. 14 - Prob. 5SPCh. 14 - (Percent of sales forecasting) Which of the...
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