1. Your firm has $45.0 million invested in accounts receivable

1. Your firm has $45.0 million invested in accounts receivable, which is
90 days of net revenues. If this value could be reduced to 50 days,
what annual increase in income would your firm realize if the increase
in cash could be invested at 7.5 percent?2. Your firm’s strategic plan
calls for a net increase in total assets of $100 million during the next
five years, which represents an annual compounded growth rate of 15
percent. Equity growth is also projected to be 15 percent per year.
Assume that the firm’s Total Asset Turnover will average 1.0 in each of
the five years and Equity Financing percentages will remain constant at
50 percent. The firm projects Reported Income Index values to be 0.85
each year. What is the required Total Margin that will make this plan
financially feasible?Use the following information to answer questions
3, 4, and 5:You have been asked to establish a pricing structure for
radiology on a per-procedure basis. Present budgetary data is presented
below: Budgeted Procedures $10,000Budgeted Cost $400,000Desired Profit
$80,000It is estimated that Medicare patients comprise 40 percent of
total radiology volume and will pay on average $38.00 per procedure.
Approximately 10 percent of the patients are cost payers. The remaining
charge payers are summarized below: Payer Volume % Discount %Blue Cross
20 4Unity 15 10Kaiser 10 10Self-Pay 5 40 50%3. What rate must be set to
generate the required $80,000 in profit in the preceding example? 4. If
the forecasted volume increased to 12,000 procedures and budgeted costs
increased to $440,000, while all other variables remained constant, what
price should be established? 5. Assume that the only change in the
original example data is that Blue Cross raises their discount to 20
percent. What price should be set? 6. You wish to retire a $10,000,000
bond that can be called in 5 years for 110 percent of par value, or
$11,000,000. You also need to make year-end interest payments of
$700,000 per year in each of the next five years. If you can invest
money at 8 percent, how much money must you set aside today to meet
these obligations?