Please help me with 8 questions. SOME of them have been started. PLEASE CHECK ACCURACY OF THE EQUATIONS AND ANSWERS AND PROVIDE EQUATIONS AND ANWERS FOR EACH PROBLEM

Thank you Please answer problems on excel attachment

\f(16-1) Williams & Sons last year reported sales of $10 million and an inventory turnover ratio of The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 5 while maintaining the same level of sales, how much cash will be freed up? Answer: $3,000,000 million Solution Sales = $10 million Inventory turnover = 2 Therefore, Inventory = 10/2 = $5million Now suppose the inventory turnover ratio becomes 5 Therefore, new inventory will be = 10/5 = $2million Hence, Cash freed up will be = $5 - $2 = $ 3 million. (16-2) Medwig Corporation has a DSO of 17 days. The company averages $3,500 in credit sales each day. What is the company's average accounts receivable? Answer: $59,500 Solution DSO = Accounts Receivables / (Sales/365) 17 = AR / 3500 AR = 3500 * 17 AR = 59,500 (16-4) A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Solution:-Computation of the Effective Cost of Trade Credit Assume the Payment is $100. Credit terms of 1/15 net 45 and $100 payment $1 interest (.01*100) Period rate = 1 / 99 = 1.01% Period = (45 - 15) = 30 days 365 / 30 = 12.17 periods per year EAR = (1+1.01%)^12.17 - 1 = 13.01% As customer is paying on 60th day, Period = (60 - 15) = 45 days 365 /45 = 8.11 periods per year EAR = (1+1.01%)^8.11 - 1 = 8.49% So Retailers EAR for 60 day payment is8.49% Also if we have to calculate the Loss to retailer, it will be13.01% - 8.49% = 4.52% Effective cost of Trade Credit is 4.52% (16-5) A chain of appliance stores, APP Corporation, purchases inventory with a net price of $500,000 each day. The company purchases the inventory under the credit terms of 2/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Solution: - Computation of the Average Account Payable for APP Corporation Average Payable Average Payable = Average Payable Period* Average Daily Credit Period Average payable = 15*$500,000 Average payable = $7,500,000 Average payable after discount= ($7,500,000*98)/100 Average payable after discount = $7,350,000 Average Account Payable is $7,350,000 (17-1) At today's spot exchange rates 1 U.S. dollar can be exchanged for 9 Mexican pesos or for 111.23 Japanese yen. You have pesos that you would like to exchange for yen. What is the cross rate between the yen and the peso; that is, how many yen would you receive for every peso exchanged? Yen/Peso= 11123/9= 12358 (17-2) The nominal yield on 6-month T-bills is 7%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate? Forward exchange rate/spot exchange rate= 1 + rh/ 1 + rf Ft / 0.009 = 1 + 3.5% / 1 + 2.75% Ft / 0.009 = 1.035/ 1.0275 Ft/ 0.009 = 1.00729927 Ft / 0.009 x 1.00729927 Ft= $ 0.00907 (17-3) A computer costs $500 in the United States. The same model costs 550 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Spot rate= Ph/ Pf = 550/550 I euro= 0.9091 USD 550 /500 $1 = 1.1 euro (17-4) If euros sell for $1.50 (U.S.) per euro, what should dollars sell for in euros per dollar? (17-4) If euros sell for $1.50 (U.S.) per euro, what should dollars sell for in euros per dollar