Question
Suppose your firm receives a $5.79 million order on the last day of the year. You fill the order with $1.76 million worth of inventory.
Suppose your firm receives a $5.79 million order on the last day of the year. You fill the order with $1.76 million worth of inventory. The customer picks up the entire order the same day and pays $1.07 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $4.72 million within 40 days. Suppose your firm's tax rate is 0% i.e., ignore taxes). Determine the consequences of this transaction for each of the following:
round to two decimal places
a. Revenues will Increase/decrease by $_____ million
b. Earnings will Increase/decrease by $_____ million
c. Receivables will Increase/decrease by $_____ million
d. Cash will Increase/decrease by $_____ million
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