In this assignment, you will prepare a spreadsheet that applies concepts related to working capital and current asset management, including accounts receivable, cash flows, and inventories.

Upon successful completion of this assignment you will be able to:

• Identify working capital management techniques and illustrate its effects on short-term financing decisions.

Resources

• Textbook: Principles of Managerial Finance
• File: Eboy Corporation Student Template.xls

Instructions

1. Complete the SpreadsheetExercise on page 647 of the textbook.(attached photos)
2. ForthespreadsheetpartofthisassignmentyoucaneithercreateyourownspreadsheetorusetheonelistedintheResourcesabove.(attachedexcel)
3. Write your recommendation paper in a 200 to 250 word memo addressed to the CEO of Eboy Corporation. Include your Excel spreadsheet as an Appendix to your memo. Use Eboy Corporation as the name of the spreadsheet for your computations.
4. Use proper spelling, grammar, and APA style in your paper.
5. Submit your paper as a Word document with the spreadsheet as an appendix

Analysis of Initiating a Cash Discount for Eboy Corporation Increase in units due to discount Selling price @net 30 Variable Cost Per Unit Additional Profit Contribution fr Cost of Marginal Investment in Variable cost per unit Raw Material annual usage Accounts Receivable Sales Days Collection Period AR Turnover Average investment presently (w/o Variable cost per unit Raw Material annual usage Expected AR Turnover due to discoun 50.00 ### ### $80,000 (a.) ### 1450 ### ### 365 45.625 8.0 ### (b.) ### 1500 12.0 Average investment presently (wit ### (c.) Reduction in accounts receivable ### (d.) Opportunity cost of funds 12.5% Cost Savings from reduced investment in $18,281 (e.) Cash Discount term # Percentage of customers to take### Raw Material annual usage (new ## Selling price per unit ### Cost of Cash Discount $88,200 (f.) Net Profit (loss) from initiation of propose $10,081 (g.)