Confusion Products has projected the following sales for the coming year: Sales in the year following this

Question:

Confusion Products has projected the following sales for the coming year:

Sales in the year following this one are projected to be 15 percent greater in each quarter.

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. What is the payables period in this case?

b. Rework (a) assuming a 90-day payables period.

c. Rework (a) assuming a 60-day payables period.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

See More Books

Question Posted: Apr 24, 2012 07:54 AM

See More Questions

Lewellen Products has projected the following sales for the coming year: Sales in the year following this one are projected to be 15 percent greater in each quarter. a. Calculate payments to...
Wentworth Products has projected the following sales for the coming year Q1 $300 Q2 $390 Q3 $540 Q4 $480 Sales Sales In the year following this one are projected to be 25 percent greater in each...
Lewellen Products has projected the following sales for the coming year: Sales in the year following this one are projected to be 15 percent greater in each quarter. a. Calculate payments to...
Degrees of freedom, for a single-sample t test, equal ____ minus 1.
The XO Group Inc. conducted a survey of 13,000 brides and grooms married in the United States and found that the average cost of a wedding is $29,858 (XO Group website, January 5, 2015). Assume that...
As HR manager, you believe that one of the managers at your company is exhibiting signs of an early onset dementia; they are still below retirement age. Should you advise them to reconsider their...
Extend the knapsack problem to cope with logical precedence between activities. For instance, say that activity 1 can be selected only if activities 2, 3, and 4 are selected. Consider alternative...
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 5-42 in Chapter 5. Consider the June transactions for Lawlor Lawn Service that were presented in Chapter 5. (Cost data...
Use the attached spreadsheet to answer the following question: 1. Suppose you buy 100 shares of stock initially selling for $50, borrowing 25% of the necessary funds from your broker; that is the...
The Home Depot is the worlds largest home improvement retailer and one of the largest retailers in the United States based on net sales volume. The Home Depot operates over 2,200 Home Depot stores...
Your firm has an average collection period of 53 days. Current practice is to factor all receivables immediately at a 2.5 percent discount. What is the effective cost of borrowing in this case?...
The Bruin Corporation's purchases from suppliers in a quarter are equal to 75 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses ate 30...
Assuming both taxes and government spending increase by the same amount, calculate an expression for the effect on equilibrium output.
The problem I have identified is that healthcare leaders could benefit from addressing the issue of stress and burnout, which impact revenue (Scott, 2022). I have found a peer-reviewed article...
Facebook, Inc is the company Complete a 3-5 year forecast for your target company assuming a 10% average growth rate for the duration of the forecast period Assuming a long-term growth rate of 5%...
BSC-It is important for healthcare leaders to link their departmental balanced scorecard (BSC) to a corporate BSC because it facilitates alignment with the overall strategic objectives of the...
Hebert Company adds material at the beginning of production. The following production information is available for March: Beginning Work in Process Inventory (40% complete as to conversion) Started...
What modifications would you suggest the leaders of the steel organization when dealing with the use of more efficient technology, carbon emissions, and negative economic impacts in order tomake in...
What is a flexible budget? (Section 11.5.2)
As economic conditions change, how do banks adjust their asset portfolio?
Write the numbers in Problems 1619 in base two. 2007
1. Why would TMCC be willing to accept such a small amount today ($24,099) in exchange for a promise to repay about four times that amount ($100,000) in the future? 2. TMCC has the right to buy back...
1. Why would TMCC be willing to accept such a small amount today ($24,099) in exchange for a promise to repay about four times that amount ($100,000) in the future? 2. TMCC has the right to buy back...
1. In evaluating the Cayenne, would you consider the possible damage to Porsches reputation as erosion? 2. Porsche was one of the last manufacturers to enter the sports utility vehicle market. Why...
4 Exercise 9-6 (Algo) Lower of cost or market [LO9-1) 75 Tatum Company has four products in its inventory. Information about the December 31, 2021, Inventory is as follows: oints Product Total Cost...
A real estate investment is expected to return to its owner $3,500 per year for 16 years after expenses. At the end of year 16, the property is expected to be sold for $49,000. Assuming the required...
You borrowed $15,000 for buying a new car from a bank at an interest rate of 12% compounded monthly. This loan will be repaid in 48 equal monthly installments over four years. Immediately after the...

Confusion Products has projected the following sales for the coming year: Sales in the year following this

Question:

02 03 04 $780 S810 $840 $910 Sales 02 03Q4 Payment of accounts

Step by Step Answer:

a The payables period is zero since the company pays immediately The payment in each period is 30 p...View the full answer

Essentials Of Corporate Finance

Students also viewed these Corporate Finance questions