Calculations Shown

Indicate the effect of the following on the cash cycle: Accounts payable period goes up

Decrease

Increase

No change

Indicate the effect of the following on the cash cycle: Accounts payable turnover goes up

Increase

Decrease

No change

On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/8, net 49. What is the effective annual rate of interest for the credit period for this sale?

ABC Company has annual sales of $400,000 and cost of goods sold of $79,161. The accounts payable period is 34.53 days. What is the average accounts payable balance?

which one of the following is most indicative of a flexible short-term financial policy? 

Relatively low level of liquidity

Relatively high ratio of short-term debt to total debt

Relatively high ratio of current assets to total assets

Relatively low level of accounts receivable

Relatively low level of inventory

ABC Company has an average collection period of 29 days and factors all of its receivables immediately at a 2.4 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

ABC Company sells 2,052 chairs a year at an average price per chair of $128. The carrying cost per unit is $27.87. The company orders 242 chairs at a time and has a fixed order cost of $42.3 per order. The chairs are sold out before they are restocked. What are the total carrying costs?

The company has estimated expenses as follows:

General and administrative expenses: $3,030

Material purchases are 34 percent of sales. Material purchases are paid in the month following the purchase.

Interest payment per month: $3,105

Rent expenses per quarter starting March: $6,724

Calculate the cash outflows for June.

ABC Corporation currently has an inventory turnover of 30.57, a payables turnover of 7.69, and a receivables turnover of 5.39. How many days are in the operating cycle?

As of this morning, your firm had a ledger balance of $4,402 with no outstanding deposits or checks. Today, your firm deposited 4 checks in the amount of $161 each and wrote a check in the amount of $660. What is the amount of the collection float as of the end of the day?

ABC Company writes 384 checks a day for an average amount of $528 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $163,586 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float?

Identify a source of cash from below. Choose only one.

decrease in long-term debt

Increase in fixed assets

Decrease in accounts receivable

decrease in current liabilities

increase in inventory

ABC Corporation currently has an inventory turnover of 11.66, a payables turnover of 9.95, and a receivables turnover of 12.75. How many days are in the cash cycle?

Which of the following is a Source of Cash? Choose only one.

Increase in long-term debt

decrease in current liabilities

decrease in equity

Increase in current assets

Increase in fixed assets

Month Sales $ Month Sales $

Jan               19,300     July             16,066

Feb              28,418     Aug             39,748

Mar             39,748     Sep              19,300

Apr              16,066     Oct              39,748

May             19,300     Nov             28,418

June             28,418     Dec              16,066

Sales are collected as follows:

In the month of Sales: 33%

In the next month: 28%

After 2 months: 7%

Remainder is considered as bad debt and is not collected.

Calculate the cash collection for June.

Month Sales $ Month Sales $

Jan               16,319     July             46,147

Feb              25,501     Aug             17,598

Mar             17,598     Sep              16,319

Apr              46,147     Oct              17,598

May             16,319     Nov             25,501

June             25,501     Dec              46,147

ABC Company has annual sales of $477,105 and cost of goods sold of $198,600. The average accounts receivable balance is $96,051. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.

 The terms of the sale were 4/17, net 61. What is the effective annual rate of interest? 

 Month Sales $ Month Sales $

Jan               25,207     July             20,404

Feb              25,480     Aug             27,884

Mar             27,884     Sep              25,207

Apr              20,404     Oct              27,884

May             25,207     Nov             25,480

June             25,480     Dec              20,404

Sales are collected as follows:

In the month of Sales: 41%

In the next month: 24%

After 2 months: 13%

After 3 months: remainder is collected

Calculate the cash collection for November.

ABC Company sells 3,287 chairs a year at an average price per chair of $181. The carrying cost per unit is $15.09. The company orders 500 chairs at a time and has a fixed order cost of $66 per order. The chairs are sold out before they are restocked. What is the economic order quantity?

ABC Company has a cash cycle of 10.43 days, an operating cycle of 21.48 days, and an average collection period of 6 days. The company reported cost of goods sold of $293,104. What is the company's average balance in Accounts Payable?

Identify which of the following will increase the operating cycle. Choose only one.

decrease in days' sales in inventory

decrease in average collection period

decrease in accounts payable period

Decrease in inventory turnover ratio

decrease in accounts payable turnover ratio

ABC Company sells 3,350 chairs a year at an average price per chair of $148. The carrying cost per unit is $35.71. The company orders 302 chairs at a time and has a fixed order cost of $129 per order. The chairs are sold out before they are restocked. How many orders will company place if it follows the economic order quantity model?

As of this morning, your firm had a ledger balance of $4,524 with no outstanding deposits or checks. Today, your firm deposited 3 checks in the amount of $117 each and wrote 14 checks in the amount of $962. What is the amount of the disbursement float as of the end of the day?