Due to the extent credit period offered to customers the

Assignment Help Finance Basics
Reference no: EM13616148

There change for this company is expected to increase from 4,000,000 to 4,800,000. 80% of sales increase are from new customers. 20% from existing customers. Days sales in inventory will decline from 100 to 45 days and sales will be offset by most of the additional costs of accounts payable associated with increased purchases.

Due to the extent credit period offered to customers, the average colletion period will increase from 45 to 90 days and bad bedt will increase from 1% to 2%of sales. Variable costs will continue to be 80% of sales. the company's inventory costs average$.26 per one dollar of inventory per year. cost to carry accouts receivable average 16%.

What would you advice the firm regarding the proposed change in its credit terms?

Reference no: EM13616148

Questions Cloud

Force from an auxiliary motor 9 n 20 degrees e of n force : a 9650 kg sailboat is moving through the waters of the atlantic. initially the boat is traveling at 13 mph 21 degrees
Assume that iq scores are normally distributed with a : assume that iq scores are normally distributed with a standard deviation of 15 points and a mean of 100 points. if 100
You are considering the purchase of a nice home it is in : you are considering the purchase of a nice home. it is in every way perfect for you and in excelled condition except
In a wire with a 109-mm2 cross-sectional area 517 times : in a wire with a 1.09-mm2 cross-sectional area 5.17 times 1020 electrons flow past any point during 3.73 s. what is the
Due to the extent credit period offered to customers the : there change for this company is expected to increase from 4000000 to 4800000. 80 of sales increase are from new
A what equal positive charges in coulombs would have to be : a what equal positive charges in coulombs would have to be placed on two celestial objects with masses 7.18 x 1026 and
Henderson industries has 500 million of common equity its : henderson industries has 500 million of common equity its stock price is 44 per share and its market value added mva is
An electron in a certain region of space has an electric : an electron in a certain region of space has an electric potential energy given by ux 7.6010-15 jx 4.8010-16 jmx3 in
A one kilomole of an ideal gas under goes a reversible : a one kilomole of an ideal gas under goes a reversible isothermal expansion from a volume of 5 liters to a volume of 10

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the value of fridge- airs preferred stock

The Fridge- Air Company's preferred stock pays a dividend of $ 4.50 per share annually. If the required rate of return on comparable quality preferred stocks is 14 percent, calculate the value of Fridge- Air's preferred stock.

  The question is as followsrrsp is currently valued at

the question is as followsrrsp is currently valued at 200000. his asset allocation is 10 liquid 40 fixed income 50

  If a bank finds that its roe is too low because it has too

if a bank finds that its roe is too low because it has too much bank capital what can it do to raise is

  The dividend is expected to grow 7 percent ayear for the

warr corporation just paid a dividend of 1.50 a sharethat isdo 1.50. the dividend is expected to grow 7 percent a

  What is the payback period for this project

Christopher electronics bought new machinery for $5,045,000 million. This is expected to result in additional cash flows of $1,200,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is five year..

  The companys tax rate is 30 and its discount rate is 10

a company is considering purchasing an asset for 60000 that would have a useful life of 5 years and would have a

  Compare a three-month moving average forecast with an

for the hawkins company the monthly percentages of all shipments that were received on time over the past 12 months are

  A firm is evaluating an accounts receivable change that

a firm is evaluating an accounts receivable change that would increase bad debts from 2 to 4 of sales. sales are

  What will the nominal yield be

Low Corp. has a bond with annual interest payments of $109 maturing in 10 years at a value of $1,000 per bond. The current market price is $960. What will the nominal yield be?

  Does growth always increase value for a business

Does growth always increase value for a business? Please explain.

  How much equity financing is required for next year

The firm does not pay any dividends. Sales are expected to increase by 3.5 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

  Write some real or potential applications of the concepts

critically reflect on the importance of present and future values. what factors must be considered when calculating

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd