it sales at tens o ndards would inc od form 30 days
Q: A credit card company compounds monthly and charges an interest of 1 ½ % per month. What is the…
A: Effective Interest Rate It is a rate that discounts the approximate future cash flows over the…
Q: The Omani trade company manager put a plan to increase the days' sales outstanding in (2021) by…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: Suppose you deposited $1,000 in a credit union account that pays 7% with dailycompounding and a…
A: Excel Spreadsheet:
Q: A company plans to tighten its credit policy. The new policy will decrease the average number of…
A: In a credit policy if the collection period is reduced, the turnover of the business and accounts…
Q: ABC Co has sales of $76m for the previous year. Receivables days are 58 and receivables are financed…
A: Accounts Receivables represents the amount the customers owe to the corporation on the account of…
Q: Medwig Corporation has a DSO of 17 days. The company averages $7,750 in sales each day (all…
A: Accounts receivable are the people who owe the company. In simple words these are the people who…
Q: The annual interest rate on a credit card is 13.99%. If the minimum payment of S30 is made each…
A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…
Q: A. DEF has total forecasted gross purchases of P4,500,000 relating to a major supplier for the…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: A company plans to tighten its credit policy. The new policy will decrease the average number of…
A: Credit Policy is very crucial for company's working cycle. It should be optimal so that the…
Q: If a $27,000 loan is repaid by end of month payments of $640 and interest is at 9% compounded…
A: Loan amount = $ 27000 Monthly payment = $ 640 Interest rate = 9% Monthly interest rate = 9%/12 =…
Q: A firm sells its accounts receivables to a factor at a 3.5% discount. The average collection period…
A: Average collection period = 3 months Discount = 3.5% Receivables Turnover = 12months / Average…
Q: A credit is paid as follows: a down payment corresponding to 30% of the value of the credit, 16…
A: Fist we need to calculate present value of all payments starting at 3 months after by using annuity…
Q: Helen Bowers, the new credit manager of the Muscarella Corporation, was alarmed to find that…
A: Note: Solution for all the parts of this question (from part 1 to 5) has been given in the following…
Q: 58. ABC Company plans to tighten its credit policy. The new policy will decrease the average number…
A: The questions are multiple choice questions Required Choose the Correct Option.
Q: The bank statement opposite shows transactions over a one-month period for a savings account that…
A: Interest on savings account is calculated on daily balance in the account.
Q: Seeb Metals Incjust decided to save OMR 1605 a month for the next years as a safety net for…
A: Future Value is the value of current investments at a certain future date at the assumed…
Q: An automobile loan of $26,000 at a nominal rate of 12% compounded monthly for 48 months requires…
A: Amortization table is a schedule which shows periodic lease or loan payments. The periodic payment…
Q: Taylor Company provides the following information: Annual credit sales : $ 24,000,000 Collection…
A: Average collection period means the average time period with in which the debtor makes the payment.…
Q: A firm has total annual sales (all credit) of P1,200,000 and accounts receivable of P500,000. How…
A: Accounts receivable days = (Accounts receivables / Credit sales) x 365
Q: Medwig Corporation has a DSO of 21 days. The company averages $5,250 in sales each day (all…
A: DSO = 21 days Daily sale = $ 5,250 Annual sale = 5250*365 = $ 1,916,250
Q: Helen Bowers, the new credit manager of the Muscarella Corporation, was alarmed to find that…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The annual interest rate on a credit card is 16.99%. If a payment of $300.00 is made each month, how…
A: Calculation of Number of Months:The number of months to pay off the unpaid balance 8.74 months or 9…
Q: The Jeremy Flores Club has annual revenue of EUR 7 million and all sales are on account. Good credit…
A: 1. Max account receivables = ACP×sales365 =30×7 million365=EUR 575,342
Q: If ABC Corporation has annual credit sales of Ᵽ990,000 and its average accounts receivable is…
A: The Numerical has covered the concept of Accounting Ratio. The Formula is used to calculate the…
Q: A bank quoted 10% annual interest rate. If the bank compounds the interest rate quarterly, what…
A: Quarterly rate = Annual rate / Number of quarters in a year Quarterly rate =10% /4 Quarterly rate…
Q: A firm sells its accounts receivables to a factor at a 1.7% discount. The average collection period…
A: Effective annual interest rate formula: effective annual interest rate =1+rnn-1where,r=discount…
Q: Data Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15%,…
A: a)The computation of amount of interest on the loan is as follows:Working note:Hence, the amount of…
Q: calculate the monthly finance charge for the credit card transaction. Know that it takes 10 days for…
A: There are various method in which the interest on credit card is charges such as previous balance,…
Q: Yen Corporation will be relaxing its credit policy. Under he old policy of 2/10, n/25, sales total…
A: Receivables management is one of the important aspects of financial management and it comes under…
Q: Axis Wells and Excavation (AWE) currently generates $198,000 in annual credit sales. AWE sells on…
A: Day sales outstanding is the number of days it takes for the company to recover its revenue from…
Q: Given an annual credit sales value of 365 million; accounts receivable beg. 36.5 million, cost of…
A: Ratio analysis is a tool that establishes a relationship between the different items. It is used to…
Q: 4. Due to an urgent working capital need, a company gets a 3-month bank credit at an annual rate of…
A: Annual Rate = 22% Current fixed rate of OIS = 19% Time period 3 months
Q: be credit sales at terms n/30. National estimates that a proposed relaxatio om 30 days to 45 days.…
A: The answer is stated below:
Q: What lump sum of money must be deposited into a bank account at the present time so that $600 per…
A: Present value refers to the current valuation for a future sum. Investors determine the present…
Q: A loan of $14,400 is to be repaid in end-of-the-quarter payments of $600. How many payments are…
A: Using excel NPER function =NPER(rate,pmt,pv,fv)
Q: Your paycheck was just deposited and you noticed that had overdrawn your bank account 10 days ago.…
A: The actual cost of loan that is interest amount paid in a single year on the amount due is called as…
Q: You currently have $20,000 in the bank. The monthly interest rate is 0.5%. What equal amount could…
A: In this we have to calculate the present value FACTOR monthly and from that we can get monthly…
Q: Suppose you deposit D dollars at the beginning of each month into an account that pays a monthly…
A: Given: B = $2,600 D = $160 r = 0.005 B = D(1+r)[ (1+r)t -1]/r.
Q: The annual interest rate on a credit card is 16.99%. If a payment of $400.00 is made each month, how…
A: Credit Card is short-term debt instrument which allows cardholder to make credit purchases and make…
Q: Accounts receivable are P30,000 and the turnover rate is 24 times a year. As turnover rate of 18…
A: Formula: Accounts receivable turnover = Net credit sales / Average accounts receivable where,…
Q: A company uses services with charges that total $10,000 per month. The earnings credit rate is 5%.…
A: The conceptual formula used:
Q: Merchandise is received for $25,000 now and $50,000 in 6 months. If $10,000 is paid within a month,…
A: Solution:- Balance due in three months means the value outstanding at third period.
Q: Ammer Products has an average accounts payable balance of P850,000 and its annual net credit…
A: Accounts payable in the business means accounts of those suppliers from whom business has made…
Q: A firm has daily cash receipts of P100,000. A bank has offered to reduce the collection time on the…
A: In order to accept the bank offer, the business organizations firstly determines the net annual…
Q: What is the effective interest rate of a simple discount note for $32,000, at an ordinary bank…
A: Given: Principal amount =$32000Discount rate =13%Time duration =10 daysNumber of days in a year =360…
Based on a 360-day year, the proposed relaxation of credit standards would result in an expected increase in the average accounts receivable balance of how much?
Step by step
Solved in 2 steps
- Down Under Company's budgeted sales and budgeted cost of sales for the coming year are P126 million and P72 million, respectively. Short-term interest rates are expected to average 10%. If Down Under can increase inventory turnover from its current level of nine times per year to a level of 12 times per year, its cost saving in the coming year are expected to beA proposed relaxation of credit standards of Mama Inc. will increase the balance of accounts receivable by P95,000. The proposed relaxation will also increase the average collection period from 16 days to 3 weeks. How much is the increase in budgeted credit sales of Mama Inc. if the firm increase the average collection period to 3 weeks? Use 360 days. 6,480,000 3,025,000 6,300,000 1,750,000A proposed relaxation of credit standards of Bulldogs Inc. will increase the balance of accounts receivable by P95,000. The proposed relaxation will also increase the average collection period from 16 days to 3 weeks. How much is the increase in budgeted credit sales of Bulldogs Inc. if the firm increase the average collection period to 3 weeks? Use 360 days. 3,025,00 6,300,000 6,840,000 1,750,000
- AB Company’s budgeted sales and cost of sales for the coming year are P72 million and P45 million respectively. Shortterm interest rates are expected to average 10%. If the company can increase inventory turnover from its current levelof 9 times per year to 12 times per year, its cost savings in the coming year are expected to beA. P125,000 C. P375,000B. P300,000 D. P500,0002. AB Company's budgeted sales and cost of sales for the coming year are P72 million and P45 million respectively. Short term interest rates are expected to average 10%. If the company can increase inventory turnover from its current level of 9 times per year to 12 times per year, its cost savings in the coming year are expected to be A. P125,000 C. P375,000 B. P300,000 D. P500,000Panda Co. is planning to change its collection policies that will change the collection period from 5 days to 10 days. The daily projected credit sales for the upcoming year of the company is P40,000. Prevailing rates are expected at 3%. To make the change in collection policy cost-beneficial, the minimum savings in collection cost for the coming year should be?
- A company plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days and reduce the ratio of credit sales to total revenue from 70% to 60%. The company estimates that projected sales would be 5% less if the proposed new credit policy were implemented. The firm’s short-term interest cost is 10%. Projected sales for the coming year are P100 million. Assume a 360-day year, the increase (decrease) on A/R of this proposed change in credit policy is A. P0 B. (P5,000,000) C. (P6,666,6667) D. (P13,000,000)4. Sovereign-Tea Company projected to make even monthly cash payments of P150,000 during the year. The average return on money market placements is eight percent per annum and payment for cash transfer is expected to be P250 per transaction. Determine the total relevant cost using the Baumol Model.14. A company plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days and reduce the ratio of credit sales to total revenue from 70% to 60%. The company estimates that projected sales would be 5% less if the proposed new credit policy were implemented. The firm's short-term interest cost is 10%. Projected sales for the coming year are P100 million. Assume a 360-day year, the increase (decrease) on A/R of this proposed change in credit policy is A. PO B. (P5,000,000) c. (P6,666,6667) D. (P13,000,000)
- ABC Co. is planning to introduce changes in its collection procedures. The new procedures are expected to make the collection period longer by 10 days, although there will be no change in bad debts. For the coming year, ABC Co's budgeted sales is P32,400,000 or P90,000 per day. Short-term interest rates are expected to average at 9% per annum. As a result of the changes in collection procedures, ABC Co.'s average Account Receivable balance will increase (decrease) by? To make the changes in collection procedures cost-beneficial, the minimum savings in collection costs for the coming year should be?BRLM Company is planning to relax its credit standards to boost sales. As a result, sales are expected to increase 16 percent from 3,000 units per year to 3,480 units per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1.5 percent level. The price per unit is P4,250, the variable cost per unit is P3,060. The firm’s required return on investment is 20 percent.What is the cost of marginal bad debts under the proposed plan? Group of answer choices P168,300 P19,445 P38,838 P258,923 What is the net result of implementing the proposed plan? Group of answer choices –P312,474 +P168,274 +P319,260 –P168,274The Sandbox Company is planning to increase its level of collection expenditures form the current P250,000 to P400,000, on credit sales of P24,000,000. This move is expected to accelerate payments and increase turnover of receivables from 8 to 12 times and cut bad debts from two percent to one percent of credit sales. The opportunity cost of funds is 12 percent. The company uses a 360-day year in planning and controlling. Required: Calculate the following (show your solution): 1. Receivables turnover before and after the change in the collection policy. 2. Average receivable balance before and after the change in collection policy. 3. Net advantage or disadvantage of the new collection policy