Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business. The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely. Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum. To discuss: Facts revealed by cash budget regarding the target cash level.

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Answer 1

Question

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

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Consider the following gasoline sales time series. If needed, round your answers to two decimal digits. Week Sales (1,000s of gallons) 1 17 2 21 3 19 4 23 5 18 6 16 7 20 8 18 9 22 10 20 11 15 12 22 (a) Show the exponential smoothing forecasts using α = 0.1, and α = 0.2. ExponentialSmoothing Week α = 0.1 α = 0.2 13 (b) Applying the MSE measure of forecast accuracy, would you prefer a smoothing constant of α = 0.1 or α = 0.2 for the gasoline sales time series? An smoothing constant provides a more accurate forecast, with an overall MSE of . (c) Are the results the same if you apply MAE as the measure of accuracy? An smoothing constant provides a more accurate forecast, with an overall MAE of . (d) What are the results if MAPE is used? An smoothing constant provides a more accurate forecast, with an overall MAPE of .

After many sunset viewings at SUNY Brockport, Amanda dreams of owning a waterfront home on Lake Ontario. She finds her perfect house listed at $425,000. Leveraging the negotiation skills she developed at school, she persuades the seller to drop the price to $405,000. What would be her annual payment if she opts for a 30-year mortgage from Five Star Bank with an interest rate of 14.95% and no down payment? a- $25,938 b- $26,196 c- $24,500 d- $27,000

Answer 2

Question

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

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Answer 3

Question

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

Expert Solution & Answer

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Answer 4

Question

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

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Answer 5

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

Answer 6

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

Answer 7

Chapter 21, Problem 16MC

p)

1)

Summary Introduction

Case summary:

Chief financing officer of Company RR, a speciality coffee manufacturer, is re-thinking about its working capital policy and wants to re-new its line of credit and it wouldn’t ready to build payroll, probably forcing the company out of business.

The scare has forced the company to examine carefully about each component of working capital to make sure it is required, and decide whether the goal is to determine the line of credit are often eliminated entirely.

Previously, it has done little to look at assets and mainly because of poor communication among business functions and the decisions about working capital cannot be made at vacuum.

To discuss: Facts revealed by cash budget regarding the target cash level.

Answer 8

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

Answer 9

2)

Summary Introduction

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

Answer 10

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

Answer 11

3)

Summary Introduction

To discuss: Other potential cash inflows other than collections.

Answer 12

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

Answer 13

4)

Summary Introduction

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

Answer 14

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

Answer 15

5)

Summary Introduction

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 21 - a. Working capital; net working capital; net...Ch. 21 - Prob. 2Q Ch. 21 - Is it true that, when one firm sells to another on...Ch. 21 - What are the four elements of a firm’s credit...Ch. 21 - Prob. 5Q Ch. 21 - Prob. 6Q Ch. 21 - Prob. 7Q Ch. 21 - Is it true that most firms are able to obtain some...Ch. 21 - What kinds of firms use commercial paper?Ch. 21 - Prob. 1P

Solution Summary: The author explains how the chief financing officer of a coffee manufacturer re-thinks its working capital policy and decides whether the goal is to determine the line of credit are often eliminated.

Concept explainers

To discuss: Whether depreciation expenses be explicitly included in company’s cash budget or not.

To discuss: Other potential cash inflows other than collections.

To discuss: The way of incorporating interest earned or paid on loans or short term securities into cash budget.

To discuss: Opinions of person J on bad debts and sales are realistic or not and the way bad debts deal with in a cash budgeting sense.

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Chapter 21 Solutions