Supplies product to large well-known retail chain

Assignment Help Financial Management

Reference no: EM131551421

Assume you are the CFO of a factory that supplies product to a large well-known retail chain. It is your company's policy, and the general policy of your industry, to offer product to this retail chain on 30-day credit terms. However, it turns out that this large well-known retail chain consistently extends their payments out to 60 days. When pressed, the retail chain responds to all the suppliers that they can choose to either accept the payments as they currently are or lose the business entirely.

Is this ethical? Should it matter whether this practice is ethical or not? In answering these questions, consider the impact on a small purchaser versus a large purchaser.

If you were the CFO of this large well-known retail chain, how might you justify this practice and respond based on what you know about operating and cash cycles?

Reference no: EM131551421

Questions Cloud

Which bond would pay a higher coupon payment : Assuming all other bond characteristics are identical which bond would pay a higher coupon payment? Very briefly explain why.

Role of the corporate raider in fourth merger wave : Describe the role of the Corporate Raider in Fourth Merger Wave. What were some of methods used to help these individuals and groups accomplish their objectives

What is the true initial cost figure the company : What is the true initial cost figure the company should use when evaluating its project?

Sales minus cost of goods sold results in gross margin : Consider the following information about Sony (and keep in mind that sales minus cost of goods sold results in $ gross margin):

Supplies product to large well-known retail chain : Assume you are the CFO of a factory that supplies product to a large well-known retail chain.

About the nonconstant growth : Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

Estimate the first-year cash flow for proposed project : Project cash flow Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project.

What is the standard deviation of stock returns : what was the stock's return for the missing year? What is the standard deviation of the stock's returns?

Calculate the npv and irr without mitigation : A mining company is considering a new project. Calculate the NPV and IRR with mitigation. Calculate the NPV and IRR without mitigation.

User Account

All Pages