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X company is concerned about the high cost of its negotiated financing 12% per annum. The company's principal use of negotiated financing is in connection with operating cycle investments. The firm expects to spend $14.4 million per year on operating cycle investment in each of the next three years. In assessing the company's cash management efficiency the treasurer has determined:
- company's average payment period is 35 days. Industry average is 50 days and the average payment period for the company's three main competitors is 55 days.-the average age of the company's inventory is 70 days. Industry standard is 35 days.-company's average collection period is 70 days. Industry average is 37 and its competitor's aerage is 33 days.-One time aggregate expenditure $145,000 of company's management of payables, inventory and receivables into line with industry standards.
Purchases, production and sales are constant through out the year, evaluate the companies operating and cash conversion cycles, its need for negotiated financing and cost of its operational inefficiency relative to industry standards. Evaluate whether the company should incur addditional costs to achieve indusry standards. Identify additional information that may allow a more complete analysis of the situation and other considerations that may affect the company's decision in this matter.
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Underwriters have informed Taussig's management that it must price th enew issue to the public at $27.53 per share to ensure that all shares will be sold.
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The remainder was paid within the 30-day term. At the end of the annual accounting period, December 31, 2010, 90% of the merchandise had been sold and 10% remained in inventory. The company uses a periodic system.
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Suppose a German company issues a bond with a par value of 1000, 15 years to maturity, and a coupon rate of 7.7 percent paid annually. If the yield to maturity is 8.8 percent, what is the current price of the bond
The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $50 million on a large-scale, integrated plant that will provide an expected cash flow stream of $8 million per year for 20..
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