Bafinmax Learning Activity 1 finals with answers students PDF

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LEARNING ACTIVITY 1 FINALS WITH SOLUTIONS AND ANSWER...

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FINANCIAL MANAGEMENT 2nd Term, A.Y 2021 - 2022 BAFINMAX Module 3: Working Capital Management Module 4: Cash & Securities Management Activity no. 1 - finals NAME: (surname first)______________________________ SCORE:__________________ YR./ SEC.: _________________ DATE: ___________________ General Instruction: Type your answer on the beside the number. (1pt. each) Part I. Answer: a. OC

b.

c.

Average age of inventories + Average collection period = 90 days ÷ 60 days = 150 days CCC = Operating cycle - Average payment period = 150 days - 30 days = 120 days Resources needed = (total annual outlays ÷ 365 days) × CCC = [$30,000,000 ÷ 365] × 120 = $9,863,013.70

Part II. Answer a. AAI

=

= OC

CCC

b.

c.

365 days ÷ 8 times inventory = 46 days = AAl + ACP = 46 days + 60 days = 106 days = OC - APP = 106 days - 35 days = 71 days

Daily cash operating expenditure = total outlays ÷ 365 days = $3,500,000 ÷ 365 = $9,589 Resources needed = daily expenditure × CCC = $9,589 × 71 = $680,819 or 677,226.03 or 680,822 Additional profit = (daily expenditure × reduction in CC) × financing rate = ($9,589 × 20) × 0.14 = $26,849

Part III.

1

Answer:

Month

Total Funds Requirements

Permanent Requirements

Seasonal Requirements

January

$2,000,000

$2,000,000

February

2,000,000

2,000,000

0

March April

2,000,000 4,000,000

2,000,000 2,000,000

0 2,000,000

May

6,000,000

2,000,000

4,000,000

June July

9,000,000 12,000,000

2,000,000 2,000,000

7,000,000 10,000,000

August

14,000,000

2,000,000

12,000,000

September October

9,000,000 5,000,000

2,000,000 2,000,000

7,000,000 3,000,000

November December

4,000,000 3,000,000

2,000,000 2,000,000

2,000,000 1,000,000

$

0

Average permanent requirement  $2,000,000 Average seasonal requirement

 $48,000,000  12  $4,000,000

b.

Aggressive

 ($2,000,000  0.17)  ($4,000,000  0.12)

 $340,000  $480,000  $820,000 Conservative  ($14,000,000  0.17)  $2,380,000 Part IV. Answer: 1. AFN = 𝐴𝐴𝐴𝐴𝐴𝐴 0 ∗ 𝐴𝐴𝐴𝐴 𝐴ℎ 𝐴𝐴𝐴𝐴 – 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 0 ∗ 𝐴𝐴𝐴𝐴𝐴ℎ 𝐴𝐴𝐴𝐴 − (𝐴𝐴𝐴𝐴𝐴 1)(𝐴𝐴𝐴𝐴𝐴𝐴 𝐴 𝐴𝐴𝐴𝐴𝐴 )(𝐴𝐴𝐴𝐴 𝐴𝐴𝐴𝐴 𝐴𝐴𝐴𝐴𝐴) AFN = (1,100,000 * 10%) – (200,000 * 10%) – (3,000,000 *1.1) AFN = 90,000-55,000 AFN = 35,000 2. AFN = (800,000 * 10%) – (200,000 * 10%) – (3,000,000 *1.1) AFN = 60,000-55,000 AFN = 5,000 Part V. Answer:

FINANCIAL MANAGMENT 2

Assets consist of cash, marketable securities, receivables, inventories, and fixed assets. Therefore, we can break the A*/S0 ratio into its components— cash/sales, inventories/sales, and so forth. Then, We know that the inventory turnover ratio is sales/inventories = 3 times, so inventories/sales 1/3 = 0.3333. Further, if the inventory turnover ratio can be increased to 4 times, then the inventory/sales ratio will fall to 1/4 = 0.25, a difference of 0.3333 − 0.2500 = 0.0833. This, in turn, causes the A*/S0 ratio to fall from A*/S0 = 1.6 to A*/S0 = 1.6 − 0.0833 = 1.5167. This change has two effects: First, it changes the AFN equation; and second, it means that Barnsdale currently has excessive inventories. Because it is costly to hold excess inventories, Barnsdale will want to reduce its inventory holdings by not replacing inventories until the excess amounts have been used. We can account for this by setting up the revised AFN equation (using the new A*/S 0 ratio), estimating the funds that will be needed next year if no excess inventories are currently on hand, and then subtracting out the excess inventories that are currently on hand: Present Conditions: So Therefore

Forecast of Funds Needed, First Year: ΔS in first year = 0.2($100 million) = $20 million AFN = 1.5167($20) – 0.4($20) – 0.1(0.55)($120)−$8:3 AFN = $30.3 − $8 − $6.6 − $8:3 = $7.4 million Forecast of Funds Needed, Second Year: ΔS in second year = gS1 = 0.2(120 million) = $24 million AFN = 1.5167($24) − 0:4($24) − 0:1(0:55)($144) AFN = $36.4 − $9.6 − $7.9 = $18:9 million

Part VI. Answer: 1. 20,000 2. 10,000

3. 500 4. 10

5. 1,000 Part VII Answer:

FINANCIAL MANAGMENT 3

1. 20,000

2. 16,500 3. 3,500

Kawikaan 18:10 Ang pangalan ng Panginoon ay matibay na moog: tinatakbuhan ng matuwid at naliligtas.

FINANCIAL MANAGMENT 4...