Fin 419 week 71 - university of phoenix PDF

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fin 515 Research 7 | Ch. 16 | | | | | 18. 1 Funds Management Williams & Daughters last year reported sales of $10 , 000, 000 and a listing turnover relation of 2. The corporation is now taking on a new products on hand system. In case the new product is able to decrease the firm’s products on hand level and increase the firm’s inventory yield ratio to five while maintaining precisely the same level of revenue, how much cash will probably be freed up? Inventory sama dengan Sales as well as inventory yield ratio =10 million/2 sama dengan 5 , 000, 000 Inventory sama dengan Sales as well as inventory yield ration sama dengan 10 , 000, 000 / 5 various = a couple of million 5 various million ~ 2 , 000, 000 = the 3 million 18. 2 Receivables Investment Medwig Corporation possesses a DSO of 17 days and nights. The company uses $3, five-hundred in credit rating sales everyday. What is the company’s ordinary accounts receivable? AR= Credit rating sales every day x length of collection period $3, 500 x 17 = $59, 500 16. 3 Cost of Trade Credit What is the nominal and effective cost of trade credit under the credit terms of 3/15, net 30? 30 days, 3% low cost is available in the event that paid within 15 days, 365 days a yr Nominal cost of trade credit = ( 3/97) x [365/(30-15)] = 0. 0309 ´ 24. 33 = 0. 7526 = 75. 26%. Effective cost of trade credit = (1. 0309)24. 33 - 1 . 0 = 1 . 0984 = 109. 84%. 16. 4 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms. ) What is the retailer’s effective cost of trade credit? Effective cost of trade credit = (1 + 1/99)8. 11 - 1 . 0 = 0. 0849 = 8. 49%. 16. five Accounts Payable A chain of appliance stores, APP Corporation, purchases products on hand with a net price of $500, 1000 each day. The corporation purchases the inventory beneath the credit conditions of 2/15, net theri forties. APP at all times takes the discount although takes the complete 15 days to pay their bills. Precisely what is the average accounts payable with regards to APP? Net purchase price of inventory sama dengan $500, 000/day. Credit conditions = 2/15, net theri forties. $500, 1000 ´ 12-15 = $7, 500, 1000....