Question 1:

ACCOUNTS RECEIVABLE DEKA IS A SMALL COMPANY RUN BY A GROUP OF STUDENTS WHO POLK. HO PLAY RECORDS FOR PARTIES. ALTHOUGH THEY ARE ALWAYS BUSY AND INSIST ON A DEPOSIT OF 50% OF THE FEE THEY FIND THEY ALWAYS SEEM TO BE OUT OF MONEY. CLARENCESAYS ITS BECAUSE THEY SPEND TOO MUCH BUT DEIDRE THINKS IT IS BECAUSE THEY ARE NOT COLLECTING THEIR BILLS POINTING OUT THAT THEY INVOICED $155,000 WORTH OF BUSINESS IN JUNE/JULY/AUGUST BUT S' COLLECT ON $72,000 OF IT. KUNDI ARGUES THAT THEY HAVE TO GIVE PEOPLE TIME TO PAY. HOWEVER, EVEN HE AGREES THAT THEIR 30 DAYS CREDIT TERMS SHOUD BE ENOUGH. CLARENCE SAYS THAT IF THEY CAN FIND SOME MONEY HE CAN BUY MOREEQUIPMEN EQUIPMENT WHICH WILL INCRESE THEIR BUSINESS AND PROVIDE A 10% ROI. DETERMINE WHAT DEKA DJ'S DAYS OUTSTANDING ARE CURRENTLY, WHAT THERE ACCOUNTS RECEIVABLE LEVEL WILL BE IF THEY STICK TO THEIR CREDIT TERMS OF 30 DAYS, HOW MUCH MONEY WILL BE RELEASED, AND HOW MUCH PROFIT THEY CAN MAKE IF REDUCE THEIR ACCOUNTS RECEIVABLE TO 15 DAYS. 30 DAYS. THERE ARE 91 DAYS IN / N A QUARTI TER. CURRENT TARGETTED SALES AVERAGE SALES COLLECTION PERIOD INVESTMENT IN AR REDUCTION IN AR INCREMENTAL PROFIT 10%INVENTORY MANAGEMENT A SLASH LIQUIDATORS OFFERS CONSUMERS A WIDE ASSORTMENT OF ITEMS FROM CLOTHING TO ELECTRONICS AT DEEP DISCOUNT PRICES. SLASH GETS ITS PRODUCTSFROM COMPANIES WHO HAVE HAD FIRES FLOODING, BANKRUPTCY OR OTHER DISASTERS AND WANT TO GET RID OF ALL THEIR STOCK VERY FAST AND CHEAPLY. THE BUYERS AT SLASHLOV SLASH LOVI E A DEAL AND JUMP AT THE CHANCE TO GET LARGE AMOUNTS OF GOOD QUALITY MMEI MERCHANDISE AT ROCK BOTTOM PRICES. RECENTLY, WHEN THE OWNERS DECIDEDTO BUILD A WAREHOUSE THEY FOUND THAT THEY DID NOT HAVE THE CASH. THEIR ACCOUNTANT SHOWED THEM THAT THEY HAD SALES OF $25,750,000 IN THE PREVIOUS YEAR BUT WERE HOLDING INVENTORIES OF $15,350,000. THEIR COGS IS 60% OF : OF SALES. HOW MANY INVENTORY TURNS IS SLASH CURRENTLY ACHIEVING? IF THEY COULD REDUCE THEIR INVNTORY TURNS TO 3.5 TIMES A YEAR HOW MUCH MONEY WOULD THAT RELEASE FOR THEIR WAREHOUSE?IF THE WAREHOUSE ALLOWS THEM TO SERVICE A NEW MARKET AND WILL BRING THEN A 14 % RETURN, HOW MUCH PROFIT WILL THEY MAKE ON INVENTORY REDUCTION. ION? CURRENT TARGETTED COST OF GOODS SOLD INVENTORY TURNS INVENTORY LEVEL REDUCTION IN INVENTORY INCREMENTAL PROFIT @14%B MOBILE RADIO CORPORATION MAKES A CAR RADIO . RECENTLY IT WON A 12 MONTH CONTRACT TO INSTALL 35,000 OOF THEIR TOP END RADIO CD/DVD/EQUIPMENTIN THE NEW 2020 GMC TRUCKS. CURRENTLY WITHOUT THE GMC ACCOUNT, MOBILE COST OF GOODS SOLD FOR $3,500,000 FOR THE CAR RADIOS ANNUALLY. THE COST OF GOODS SOLD FOR THE NEW CONTRACT WILL BE $500,000 $500,000 1) WITHOUT THE GMC TRUCK CONTRACT, MOBILE RADIO KEEPS AN AVERAGE OF $875,000 WORTH OF INVENTORY. HOW OFTEN DOES MOBILE'S INVENTORY TURN? 2) WITH THE GMC ACCOUNT INCLUDED, HOW MUCH INVENTORY WOULD MOBILE HAVE TO KEEP ON HAND TO MAINTAIN THEIR CURRENT INVENTORY TURNS? 31 IF MOBILE GETS 12% ANNUAL RETURN ON AN INVESTMENT IN CAPITAL ASSESTS, WHAT IS OPPORTUNITY COSTS MOBILE IS FACING IN TAKING THE GMC CONTRACT? CURRENT TARGETTED COST OF GOODS SOLD INVENTORY TURNOIVER INVENTORY LEVEL CHANGE IN INVENTORY PROFIT