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Calculating Float. You have $ 3 5 , 4 0 0 on deposit with no outstanding checks or uncleared deposits. One day you write a
Calculating Float. You have $ on deposit with no outstanding checks or uncleared deposits. One day you write a check for $ and then deposit a check for $ What are your disbursement, collection, and net floats? Size of Accounts Receivable. The Johnson Corporation has annual credit sales of $ million. The average collection period is days. What is the average investment in accounts receivable as shown on the balance sheet? Terms of Sale. A firm offers terms of net What effective annual interest rate doe the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if: a The discount is changed to percent b The credit period is increased to days. c The discount period is increased to days. d What is the EAR for each scenario? Safety Stocks and Order Points. Sache, Inc., expects to sell of its designer suits every week. The store is open seven days a week and expects to sell the same number of suits every day. The company has an EOQ of suits and a safety stock of suits. Once an order is place, it takes three days for Sache to get the suits in How many orders does the company place per year? Assume that it is Monday morning before the store opens, and a shipment of suits has just arrived. When will Sache place its next order? Agency Issues. It is sometimes argued that excess cash held by a firm can aggravate agency problems discussed in Chapter and more generally, reduce incentives for shareholder wealth maximization. How would you frame the issue here? Use of Excess Cash. One options a firm usually has with any excess cash is to pay its suppliers more quickly. What are the advantages and disadvantages of this use of excess cash? Use of Excess Cash. Another option usually available for dealing with excess cash is to reduce the firm's outstanding debt. What are the advantages and disadvantages of the use of excess cash?
Calculating Float. You have $ on deposit with no outstanding checks or uncleared
deposits. One day you write a check for $ and then deposit a check for $ What are
your disbursement, collection, and net floats?
Size of Accounts Receivable. The Johnson Corporation has annual credit sales of $ million.
The average collection period is days. What is the average investment in accounts receivable
as shown on the balance sheet?
Terms of Sale. A firm offers terms of net What effective annual interest rate doe the
firm earn when a customer does not take the discount? Without doing any calculations, explain
what will happen to this effective rate if:
a The discount is changed to percent
b The credit period is increased to days.
c The discount period is increased to days.
d What is the EAR for each scenario?
Safety Stocks and Order Points. Sache, Inc., expects to sell of its designer suits every week.
The store is open seven days a week and expects to sell the same number of suits every day.
The company has an EOQ of suits and a safety stock of suits. Once an order is place, it
takes three days for Sache to get the suits in How many orders does the company place per
year? Assume that it is Monday morning before the store opens, and a shipment of suits has
just arrived. When will Sache place its next order?
Agency Issues. It is sometimes argued that excess cash held by a firm can aggravate agency
problems discussed in Chapter and more generally, reduce incentives for shareholder wealth
maximization. How would you frame the issue here?
Use of Excess Cash. One options a firm usually has with any excess cash is to pay its suppliers
more quickly. What are the advantages and disadvantages of this use of excess cash?
Use of Excess Cash. Another option usually available for dealing with excess cash is to reduce
the firm's outstanding debt. What are the advantages and disadvantages of the use of excess
cash?
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