A/R Sales Profits The firm restricts its credit standards. The terms of trade are changed from 2/10, net 30, to 3/10, net 30. The terms are changed from 2/10, net 30, to 3/10, net 40. The credit manager gets tough with past-due accounts.
Q: Thomas who lives in Vancouver purchased a piece of equipment from Australia for A$44,230. She was ch...
A: Calculate price of Equipment in C$ as below: C$1=A$1.0291A$1=C$11.0291A$44,230=C$11.0291×44,230A$44,...
Q: 4) Retirement: You have just retired from your company after working for twenty years. Your company ...
A: Option 1: Receiving $250000 today Option 2: Receiving $350000 in 5 years time So, Present value of t...
Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi- weekly (every two ...
A: There are two methods to charge interest on the loan taken. One is the simple interest method and ot...
Q: FAB Corporation will need 200,000 Canadian dollars (C$) in 90 days to cover a payable position. Curr...
A: Call option: A call option is the right to buy an underlying asset at a specified price over a given...
Q: Home Place Hotels, Inc., is entering into a 3-year remodeling and expansion project. The construct...
A: Give data; last dividend paid = D0= $ 2.40 Growth rate for year 1 ( g1) = 0% growth rate for year 2...
Q: Assume that the Russia places a strict quota on goods imported from the U.S. and that the U.S. does ...
A: Demand and supply for the currency is one of the factors that affect exchange rate determination for...
Q: Front Beam Lighting Company has the following ratios compared to its industry for 2008. Fron...
A: Given information: Return on assets of Front Beam is 12% Return on assets of Industry is 5% Return ...
Q: Carni’s boss stated that after reviewing first-quarter earnings, the companydecided to invest in onl...
A: Capital Budgeting is an art of analyzing the investment that worth's more than that it costs to obta...
Q: Suppose a certain car audio manufacturer receives an order of a certain brand of satellite radios li...
A: The trade discounts are 25%, 12% and 6% (a) The net price factor will be calculated as follows: (100...
Q: be repaid by a payment of $1200 in six mo: rest is 10% compounded monthly, when she
A: Given: Loan amount = $2000 Instalment Paid after 6 months = $1200 Final Instalment = $1000 Interest ...
Q: In general, a firm that concentrates on local sales, has very little foreign competition, and obtain...
A: Any import becomes expensive when the local currency loses its strength with respect to the foreign ...
Q: Most evidence suggests that a positive maturity risk premium exists. How would thisaffect your calcu...
A: The question is based on the concept of calculation of interest rate in a bond with association to r...
Q: Oxy Corporation uses debt, preferred stock, and common stock to raise capital. The firm's capital...
A: WACC (weighted average cost of capital) refers to the average cost that is paid by a company to rais...
Q: Assume that you have a balance of $4500 on your Discover credit card and that you make no more charg...
A: APR is termed as the Annual Percentage Rate which is charged by any of the authorizing institution f...
Q: According to the CAPM, what is the expected return on a security given market risk premium of 13%, a...
A: CAPM(capital asset pricing model) is used to evaluate cost of equity According to it cost of equity...
Q: What is a promissory note, and what terms are normally included in promissory notes?
A: A promissory note is a financial product containing a written guarantee from one party (issuing an i...
Q: If a firm expects to have additional financial requirements in the future,would you recommend that i...
A: Convertible bonds: it is the debt security issued paying with fixed interest payments to the bond ho...
Q: How much would you be willing to pay today for an ordinary annuity that makes equal annual payments ...
A: An ordinary annuity is the series of an equal payment that is paid or received at each week, month, ...
Q: What are the three important questions of corporate finance? Please briefly explain them and indicat...
A: Following are the three important questions of corporate finance are as follows: What should we inv...
Q: I need help with the ((((red)))) check marks
A: We need to calculate payment per year and present value An annuity is a periodic payment
Q: Define times-interest-earned (TIE) ratio
A: The number of times can a business pays off its interest obligation with the current earnings is kno...
Q: Assume the bid rate of a Norwegian krone is $0.1042 while the ask rate is $.1094 at Bank A. Assume t...
A: Arbitrage is the strategy of purchasing & selling of assets in order to generate profits from di...
Q: Blooming Ltd. currently has the following capital structure:Debt: $2,500,000 par value of outstandin...
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: Define each of the following terms.e. Convertible security
A: Introduction: Usually, a security is nothing but a financial instrument and it is a tradable financi...
Q: Define each of the following terms.g. Sweetener
A: Cost of capital is the return which is paid by the company to the security holders. Investors invest...
Q: The cash flow (in $1000 units) associated with a new method of manufacturing box cutters is shown be...
A: Descartes rule defines that utmost number of required return rate will be equivalent to the number o...
Q: Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with n...
A: Calculate Cost of Debt(kd) as below: Cost of Debt , kd=Int(1-t)Int is Interest Rate paid on debtt is...
Q: Construct a cash flow diagram for the following cash flows: $10,000 outflow at time zero, $3000 per ...
A: Outflow at time 0= $10,000 Inflow in years 1 through 5= $3000 per year Time= 5 years Rate= 5% Future...
Q: Financial Planning Exercise 7Calculating approximate yield on mutual fund About a year ago, Elliot C...
A: Here we are using Microsoft excel worksheet instead of financial calculator. Capital gain=$2.70Divid...
Q: What is financial futures?
A: Financial futures are the contracts that are used for the selling and purchasing of different types ...
Q: Phil's Carvings, Inc. wants to have a weighted average cost of capital of 9%. The firm has an after-...
A: WACC (weighted average cost of capital) refers to the average cost that is paid by a company to rais...
Q: could u solve this for me?
A: a) Maturity value of note = note amount + interest for 90 days Interest for 90 days = note amount *i...
Q: A bank in Toronto charges 2.3% commission to buy and sell currencies. Assume that the current exchan...
A: Current exchange rate = US$1 = C$1.1152 Number of US dollars to be purchased = US$4000 Number of Can...
Q: Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is sel...
A: Given information: Margin requirement is 55%, Purchase price of stock is R20, Annual interest rate ...
Q: A store makes 200 cherry cheesecakes at a cost of $2.35 each. If a spoilage rate of 5% is anticipate...
A: Given: 200 cherry cheesecakes cost = $2.35 each Spoilage rate = 5% To computation of sale price To a...
Q: What is meant by the term “going private”?
A: Going private option is generally opted or decided by a company if it feels that it has no benefits ...
Q: Julie Brown is in her late 20s. She is renting an apartment in the fashionable part of town for $1,2...
A: We should rent a house if the cost of buying the condominium is more than the cost of renting or buy...
Q: Cooley Computer Repair and Service Company's stock has a beta of 1.28, the risk-free rate is 2.25%, ...
A: According to capm approach required return is equal to risk free rate plus beta times market risk pr...
Q: Ransport Company has made an investment in another company that will guarantee it a cash flow of $37...
A: Working note:
Q: What is foreign exchange rate?
A: The foreign exchange rate is the relative representation of domestic currency in terms of value of o...
Q: 4. Paying taxes on stocks What It Means to Invest in Stocks? Common stock is considered to be on...
A: Income earned by the investors for the investment made in common stock is in dividend form as well a...
Q: a. “Financial intermediaries play a crucial role in an economic crisis–they are responsible for both...
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question s...
Q: Define spin-out
A: Introduction: Spinouts helps the parent corporation by permitting it to emphasis on its core process...
Q: The company’s ratios are: Current ratio = 1.58% Quick ratio = 1.53% operating margin = 3.49% profit ...
A: Bank loan is a type of debt that can be taken by the firm to raise additional capital. In other word...
Q: Interest rates on 4-year Treasury securities are currently 6.7%,while 6-year Treasury securities yie...
A: Introduction: The principle of pure expectation claims that the slope of yield curve depends on the...
Q: Define discount interest
A: Introduction: Usually, interest is the sum charged over an amount of time by the borrower for the us...
Q: AllState Trucking Co. has the following ratios compared to its industry for 2007. AllS...
A: Return on Asset of the company is calculated as Net Income by total assets and helps in assessing th...
Indicate using a (+), (-), or (0) whether each of the following events would probably
cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in
an indeterminate manner:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Indicate using a (1), (−), or (0) whether each of the following events would probably cause accounts receivable (A/R), sales, and profits to increase, decrease, or be affected in an indeterminate manner: A/R Sales ProfitsThe firm restricts its credit standards. ______________ ______________ ______________The terms of trade are changed from 2/10, net 30, to 3/10, net 30. ______________ ______________ ______________The terms are changed from 2/10, net 30, to 3/10, net 40. ______________ ______________ ______________The credit manager gets tough with past-due accounts. ______________ ______________ ______________The contra revenue account that represents the reduction in the amount paid by a credit customer if payment is made within a specified period of time is known as which of the following: O Contra revenue account O Sales allowance account O Sales discount account O Allowance for uncollectible accounts ASUS f3 f4 f5 f6 f7 f8 f9 f10 f11 区 ロ/京 %24 & 3 4. 7. 8 9. 01 Y U G H. J K 16 5 图Which of the following refers to the ability of a firm to buy repeatedly from a supplier on trade credit without re-applying for credit? Select one: a. Net terms b. Cash discount c. Open account d. Present value of delayed payment
- What does an increasing collection period for accounts receivable suggest about a firm's credit policy? Select one: O A. The collection period has no relationship to a firm's credit policy O B. The firm is probably losing qualified customers. C. The credit policy may be too lenient. O D. The credit policy is too restrictive.Which of the following best represents a positive product of a lower number of days sales in receivables ratio? A. collection of receivables is quick, and cash can be used for other business expenditures B. collection of receivables is slow, keeping cash secured to receivables C. credit extension is lenient D. the lender only lends to the top 10% of potential creditorsFrom pages 5-1 and 5-3 of the LVN, match the term with its explanation. Put the answers in the right order *The amount of the A/R expected to be collected. * The cost of credit * The amount of the A/R not expected to be collected. * The account recognized when credit sales are recorded. Net Accounts Receivable______ Allowance for Uncollectible Accounts_______ Bad debt expense______ Accounts Receivable______
- Use the following to answer questions 16 - 19 For each transaction indicate whether it should: A. increase, B. decrease, or C. no effect. Credit sales transaction cycle Asskiabilitstockholders’ equRtøvenespenses 16. Provide services on account 17. Estimate uncollectible accounts 18. Write off accounts as uncollectible 19. Collect on account previously written offExplain the trade credit facility provided by some companies to their customers that allow them to manage their day-to-day liquidity situation and calculate the opportunity cost of an invoice that specifies the following conditions, as shown below (a. – c.):a) conditions: 1.25/10, n/30.b) conditions: 1.25/10, n/60.c) conditions: 1.5/10, n/60.McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,912,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 66 days after their purchases. Assume 365 days in year for your calculations. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. a. What is the days sales outstanding? Round your answer to two decimal places. 43.6 $ b. What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations. days 228,452 c. What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places. 3.09 %
- 7.-What are the likely effects on sales of the following change in credit policy: A) Lower the salary level required of credit applicants. A) Decrease the discounts for prompt payment. B) Increase the percentage of uncollectible accounts. C) Decrease sales volumes D) Increase sales volume1.) A Credit memo is a note from a seller indicating its intent to credit a customer’s accounts receivable. Select one: True False 2.) In a period of rising prices, the FIFO method of costing inventory results in income tax savings for companies. Select one: True False 3.) A debit memo represents a decrease to accounts payable and therefore results in less money owed to the seller. Select one: True FalseThe business made a sale of OMR 21000 ( | cost was OR 18000), on credit basis. The effect on Account Receivable will be : Select one: O a. Account Receivable will decrease by OMR 21000 O b. Account Receivable will increase by OMR 18000 O c. Account Receivable will increase by OMR 21000 O d. Account Receivable will decrease by OMR 18000