Fin 515 Homework7

16-1 money Management 16-2 Receiv adequates coronation 16-3 Cost of plenty credence 16-4 Cost of Trade Credit 16-5 Accounts Payable (16-1)Cash Management Williams & Sons buy the farm year reported sales of $10 one cat valium million and an inventory turnover dimension of 2. The association is at a time adopting a new inventory system. If the new system is able to avoid the mansions inventory level and increment the firms inventory turnover ratio to 5 plot maintaining the same level of sales, how much cash impart be freed up? Inventory = sales / inventory ratio 10,000,000 /2 = 5,000,000 10,000,000/5 = 2,000,000 Frees up 3,000,000 in cash (16-2)Receivables Investment Medwig Corporation has a DSO of 17 age. The company averages $3,500 in trust sales each day. What is the companys average accounts receivable?

17 x 3500 = 59,500 (16-3)Cost of Trade Credit What is the nominal and impelling cost of sight credit to a lower institutionalize the credit call of 3/15, interlock 30? 3/97x365/15=.7526=75.26% (1.0309) 24.33 -1 =1.0984 = 109.84% (16-4)Cost of Trade Credit A large retail merchant obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retail merchant is an important customer, suppliers allow the firm to offer its credit terms.) What is the retailers effective cost of trade credit? (1 + 1/99) ^8.11 1.0 = .0849= 8.49%If you want to get a expert essay, order it on our website: OrderEssay.net

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