Investment matching the newly changed level of receivables

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Reference no: EM131944532

1. Due to a change in credit policy, LL Corp., expects to have 50 days sales outstanding. Before the change, the firm's annual sales was $50 million, variable cost of goods sold was $35 million, and days sales outstanding was 55 days. The firms credit manager estimates that this tighter credit policy will reduce sales by $5 million. What is the additional (or reduced) amount of investment matching the newly changed level of receivables?

(PLEASE PROVIDE WORK)

a.-$1.1438 million

b. -1.2123 million

c. -1.1644 million

d. +1.1438 million

e. +1.2123 millon

2. You earn $5,000 a month. After taxes, social security contributions, and living expenses you have $200 per month that you can and will save. What is the future value of $200 saved every month for 30 years if the annual rate is of return is 12%. We are looking for the value of your savings 30 years from the time you stated saving.

Reference no: EM131944532

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