Ch. 18: Questions 3 & 11 (Questions and Problems section)
Ch. 20: Questions 8 & 14 (Questions and Problems section)
Ch. 21: Questions 4 & 7 (Questions and Problems section)
Ch. 26: Questions 1 & 2 (Questions and Problems section): Microsoft Excel template provided for Problem 2
Chapter 18, Question #3 changes in the Operating Cycle [Lo1] Indicate the effect that the following will have on the operating cycle. Use the letter to indicate an increase, the letter D for a decrease, and the letter N tor no change a. Average receivables goes up a. AVerage b. Credit repayment times for customers are increased c. Inventory turnover goes from 3 tines to 6 times. d. Payables tumov er goes from 6 times to 11 times. e. Receivables turnover oes from 7 times to 9 times f. Payments to suppliers are accelerated. Chapter 20, Question #8. Chapter 21, Question # 7 Size of Accounts Recivable [L01] The Arzona Bay Corporation sells on credit terms of net 30. Its Interest Rates and Arbitrage ILO2] The treasurer of a major U.s. firm has $30 million to invest for accounts are, on average, four days past due. If annual credit sales are $9.75 million, what is the three months. The interest rate in the United States is .31 percent per month. The interest rate in Great Britain is.34 percent per month. The spot exchange rate is .573, and the three-month forward rate is .575. Ignoring transaction costs, in which country would the treasurer want to invest the company's funds? why? company's balance sheet amount in accounts receivable? Chapter 21, Question # 4 Using Spot and Forward Exchange Rates ILO1l Suppose the spot exchange rate for the Canadian dollar Chapter 26, Question # 1 is Can$1.09 and the six-month forward rate is Can$1.11 Calulating Synergy [L03] Pear Inc., has offered $357 million cash for all of the common stock in Jam Corporation. Based on recent markot information, lam is worth $319 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synerg istic benefits from the merger? what is the minim um estimated value of the synergistic benefits from the merger? Which is worth more, b. A a U.S. dollar or a Canadian dollar? ssuming absolute PPP holds what is the cost in the United States of an Elkhead beer if the price in Carnada is CanS2.50? Why might the beer actually sell at a different price in the United States? c. Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar? d. Which currency is expected to appreciate in value
