Q1. Wyler, Inc. has a beginning cash balance of $380 on March 1. The firm has projected sales of $550 in February, $700 in March, and $800 in April. The cost of goods sold is equal to 75% of sales. Goods are purchased one month prior to the month of sale. The accounts payable period is 30 days and the accounts receivable period is 15 days. The firm has monthly cash expenses of $200. What is the projected ending cash balance at the end of March? Assume that every month has 30 days.

Q2.A firm offers credit terms of 1/5, net 15. What is the effective annual rate on the credit extended if a customer foregoes the discount on a $2,000 purchase?

Q3. West Ridge Wholesalers receives an average of 120 cheques a day. The average amount per cheque is $6,400. The firm is considering a new processing system which it anticipates will reduce the average collection time by 2 days. The daily interest rate on Treasury bills is .01 percent. What is the expected daily savings of the new system?

Q4. Milo's Machining is a new business in town and the company has asked to establish credit with your firm. Milo would like to buy some equipment today at a cost of $49,999. Your variable cost for that equipment is $38,500 and your monthly interest rate is 1.5 percent. You feel that the company could become a regular customer if you grant 30 days credit. You also feel that the probability of default is only 5 percent. What would be the net present value of this decision?