Question
Suppose your firm receives a $5.86 million order on the last day of the year. You fill the order with $1.87 million worth of inventory.
Suppose your firm receives a $5.86 million order on the last day of the year. You fill the order with $1.87 million worth of inventory. The customer picks up the entire order the same day and pays $1.21 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $4.65 million within 40 days. Suppose your firm's tax rate is 0% (.e., ignore taxes). Determine the consequences of this transaction for each of the following:
a. Revenues b. Earnings c. Receivables | d. Inventory e. Cash |
a. Revenues
Revenues willincrease/decrease by $ million. (Select from the drop-down menu and round to two decimal places.)
b. Earnings
Earnings will increase/decrease by $ million. (Select from the drop-down menu and round to two decimal places.)
c. Receivables
Receivables will increase/decrease by $ million.(Select from the drop-down menu and round to two decimal places.)
d. Inventory
Inventory will increase\decrease by $ million.(Select from the drop-down menu and round to two decimal places.)
e. Cash
Cash will decrease/increase by $ million.(Select from the drop-down menu and round to two decimal places.)
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