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It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter's management is considering a lockbox system to reduce the firm's collection times. It is expected that the lockbox system will reduce receipt and deposit times to three days total. Average daily collections are $123,000, and the required rate of return is 4 percent per year. Assume 365 days per year.
What is the reduction in outstanding cash balances as a result of implementing the lockbox system?
What is the daily dollar return that could be earned on these savings?
What is the maximum monthly charge Cookie Cutter should pay for this lockbox system if the payment is due at the end of the month?
What is the maximum monthly charge Cookie Cutter should pay for this lockbox system if the payment is due at the beginning of the month?
What would be the market value of Trident Corporation if it were unlevered and what would be the expected return on equity if Trident were an all-equity firm?
An investor is considering a project that will generate $800,000 per year for four years. In addition to upfront costs, at the completion of the project at the end of the fifth year there will be shut-down costs of $500,000.
A project has an initial cost of $27,400 and a market value of $32,600. What is the difference between these two values called
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The current price of the $1,000 bond is $978. On February 1, you purchase $10,000 face amount, and your broker charges a $25 commission. How much must you remit for the purchase
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Levine Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%. What is the investment's coefficient of variation
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of it's earnings. However, investors expect Simpkins to begin paying and dividends, with the first dividend of $.50 coming 3 years from today.
Veggie Burgers, Inc., would like to maintain their cash account at a minimum level of $200,000; but expect the standard deviation in net daily cash flows to be $1,000; the effective annual rate on marketable securities to be 4.7 percent per year
All revenues were collected in cash, and all expenses, excluding depreciation, were paid in cash and all expenses exlduing depreciation were paid in cahs during the year.
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