PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 30, Problem 14PS
a)
Summary Introduction
To determine: Expected profit to grant or refuse the credit.
b)
Summary Introduction
To determine: Expected profit to grant or refuse the credit and company check whether the customer is a prompt payer or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Your supervisor tells you to change the aging category of a large account from account receivables from over 120 days to current status and prepare a new invoice to the customer with the revised date that agrees with this new category. this will change the required allowance of uncollectible accounts from $180,000 to $135,000. what is the ethical dilemma the assistant controller faces?what are the ethical considerations? consider the options and responsibilities as the assistant controller
the supervisor tells you to change the aging category of a large account from over 120 days to current status and prepare a new invoice to the customer with the revised date and that agrees with the new category this will change the required allowance of uncollectible accounts from $180,000 to $135,000. What are the potential consequences if you do comply with your supervisors instructions?Who will be negatively impacted?
Bob's Product Company takes 20 days to convert its raw materials to finished goods, 15 days to sell it, and 25 days to collect its credit sales. What is the company’s days receivable period?
Group of answer choices
60
35
25
10
15
A bank letter of credit, sometimes called a standby letter of credit, is a written promise by a bank that it will make a payment on behalf of the customer. This is different than a line of credit, which is a akin to a credit card….a line of credit allows the company to borrow funds as needed to pay any bills. A LETTER of credit is specific to the party that the company might owe money to.
Group of answer choices
True
False
Chapter 30 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 30 - Prob. 1PSCh. 30 - Components of working capital True or false? a....Ch. 30 - Inventory True or false? a. Just-in-time inventory...Ch. 30 - Inventory What are the trade-offs involved in the...Ch. 30 - Prob. 5PSCh. 30 - Prob. 6PSCh. 30 - Prob. 7PSCh. 30 - Prob. 8PSCh. 30 - Prob. 9PSCh. 30 - Credit terms Phoenix Lambert currently sells its...
Ch. 30 - Prob. 11PSCh. 30 - Prob. 12PSCh. 30 - Prob. 13PSCh. 30 - Prob. 14PSCh. 30 - Prob. 15PSCh. 30 - Credit policy How should your willingness to grant...Ch. 30 - Prob. 17PSCh. 30 - Prob. 18PSCh. 30 - Prob. 19PSCh. 30 - Prob. 20PSCh. 30 - Cash management Complete the passage that follows...Ch. 30 - Prob. 22PSCh. 30 - Prob. 23PSCh. 30 - Prob. 24PSCh. 30 - Prob. 25PSCh. 30 - Prob. 26PSCh. 30 - Prob. 27PSCh. 30 - Prob. 28PSCh. 30 - Prob. 29PSCh. 30 - Prob. 30PSCh. 30 - Prob. 31PSCh. 30 - Prob. 32PSCh. 30 - Prob. 34PSCh. 30 - Prob. 35PSCh. 30 - Prob. 36PSCh. 30 - After-tax yields Suppose you are a wealthy...Ch. 30 - Prob. 38PSCh. 30 - Prob. 39PS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Ethical Considerations. In the process of closing thecompany books, you encounter a problematic transaction. One of the company’s customers was invoicedtwice for the same project materials, resulting in a$1,000 overcharge. You immediately notify the controller, whose response is, “Let it go, it happens often.It’ll probably balance out on some future transaction.”What should you do now?arrow_forwardthe supervisor tells you to change the aging category of a large account from over 120 days to current status and prepare a new invoice to the customer with the revised date and that agrees with the new category this will change the required allowance of uncollectible accounts from $180,000 to $135,000. Identify the key internal and external stakeholders. what are the negative impacts that can happen if you do not follow the instructions of the supervisor?arrow_forwardAssume all suppliers to a large retail chain offer credit terms of 2/10, net 30. The retail chain consistently takes the 2 percent discount and pays in 60 days. When pressed on the issue, the retail chain tells the suppliers they can either accept the payments as they currently are or lose the business. Is this ethical? How might this impact a small supplier versus a large supplier? Explain.arrow_forward
- You place an order for 1,500 units of Good X at a unit price of $52. The supplier offers terms of 1/25, net 40. How long do you have to pay before the account is overdue? If you take the full period, how much should you remit. What is the discount being offered? how quickly must you pay to get the discount? If you do take the discount, how much should you remit? if you don't take the discount, how much interest are you paying implicitly? How many day's credit are you receiving?arrow_forwardJewel-Osco evaluated three different pay-by-touch systems that identify a customer by a finger scan and automatically deduct the amount of the bill directly from their checking account. The revenue alternatives were ranked according to increasing initial investment and identified as alternatives A, B, and C. Comparison i*, % Δi*, % A to DN 23.4 B to DN 8.1 C to DN 16.6 B vs. A −5.1 C vs. A 12.0 C vs. B 83.9 Based on the alternative ROR values (i*), the incremental ROR values (Δi*), and the company’s MARR of 16% per year, the alternative to select is: (a) A (b) B (c) C (d) DNarrow_forwardA customer hands you $3,850 in cash and would like to purchase 14 prepaid cards of $275 each. The customer hands you the cash with an expired ID, and is expecting you to process the transaction. You must decline the transaction for the following reasons (Select all that apply): We do not sell prepaid cards. A customer may not purchase more than $2,000 in prepaid cards within a 24-hour period. The POS will prompt for customer ID for all prepaid card purchases. Customer ID must be a valid (not expired) government issued photo ID (US or Canadian issued driver's license, state ID, passport; US military ID, US Territory ID) The customer appears to be purchasing prepaid cards just below the threshold where an ID would be needed. The customer is attempting to purchase more than the allowable number of gift cards in a single transaction.arrow_forward
- Hel Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Baker's Financial Planners purchased nine new computers for $910 each. It received a 20% discount because it purchased more than four and an additional 5% discount because it took immediate delivery. Terms of payment were 5/10, n/30. Baker's pays the bill within the cash discount period. How much should the check be? (Do not round intermediate calculations. Round your final answer to the nearest cent.) Amount $ 5835.38 8 10 of 10arrow_forwardYou delivered a printing press to your customer. When it was delivered, it was slightly dented on one side, but the dent had no effect on the performance of the printing press. To maintain company goodwill, you authorized a P500 reduction in the invoice price if the customer would keep the printing press. The customer accepted the offer. The journal entry to record the P500 would include which of the following? a. A debit to Sales Discount for P500 b. A credit to Sales Returns and Allowances for P500 c. A credit to Sales Discount for P500 d. A debit to Sales Returns and Allowances for P500arrow_forwardYou place an order for 1,100 units of Good X at a unit price of $48. The supplier offers terms of 3/30, net 40. a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. What is the discount being offered? (Enter your answer as a percent.) b-2. How quickly must you pay to get the discount? b-3. If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-1. If you don’t take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-2. How many days’ credit are you receiving? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)arrow_forward
- Nottingham Financial purchases computer parts from its suppliers 2/10, net 60. However, Nottingham routinely stretches accounts payable 10 days beyond the due date. What is the effective annual cost of not taking the trade discount? How much does the account stretching reduce the cost of not taking the trade discount?arrow_forward(Do not provide solution in imge format. and also do not provide plagarised content otherwise i dislike.) provide explanation of formula. Your firm has an average receipt size of $90. A bank has approached you concerning a lockbox service that will decrease your total collection time by 2 days. You typically receive 9,100 checks per day. The daily interest rate is 0.019 percent.If the bank charges a fee of $200 per day, what is the NPV of the lockbox project?NPV____What would the net annual savings be if the service were adopted?Net annual savings___arrow_forwardYou place an order for 1,100 units of Good X at a unit price of $48. The supplier offers terms of 3/30, net 40. How quickly must you pay to get the discount? b-3. If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-1. If you don’t take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
The management of receivables Introduction - ACCA Financial Management (FM); Author: OpenTuition;https://www.youtube.com/watch?v=tLmePnbC3ZQ;License: Standard YouTube License, CC-BY