Suppose your firm receives a ($5.9) million order on the last day of the year. You fill
Question:
Suppose your firm receives a \($5.9\) million order on the last day of the year. You fill the order with \($1.9\) million worth of inventory. The customer picks up the entire order the same day and pays \($2.8\) million upfront in cash; you also issue a bill for the customer to pay the remaining balance of \($3.1\) million in 30 days. Suppose your firm’s tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following:
a. Revenues
b. Earnings
c. Receivables
d. Inventory
e. Cash
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a Revenues The revenues generated from this transaction would be equal to the total amount of the or...View the full answer
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