| Jen Poe | | | | | | | BUS657 Corporate Managerial Finance | | | | | | | | | | | | | Week #5 | | | | | | | Assignment - Chapter 22 Mini - Case | | | | | | | | | | | | | | | | | | | 1) Calculate BB's current cash conversion cycle. | | | | | | | | | | | | | BB's Ratios: | | | | | | | Average Age of Inventory | $842,020 / [(0.57 *$43,803,000) /365] | | 12.31 | days | | Average Collection Period | $3,240,222/($43,803,000/365) | | 27.00 | days | | Average payment Period | $1,826,070/[(0.57*$43,803,000)/365] | | 26.695 | days | | | | | | | | | BB's Cash Conversion Cycle = | AAI + ACP - APP | | | | | | BB's Cash Conversion Cycle = …show more content…
The relaxation of credit standards is expected to result in a 3.8% increase in sales (the firm has sufficient excess capacity to handle the increase) as well as an increase of three days in the average collection period. They also expect bad debts to rise from the current level of 0% to 0.5% of sales. Assuming that BB requires a 13% return on investments of this type, should the firm relax its credit standards? | | | | | | | | | | Current: | | | | | | | | | | | | | | Additional profit from sales = change in sales * contribution margin | | | | | = (.038 * $43,803,000)($1.5 - $0.5126) = | $ 1,643,541.12 | | | | | | | | | | | | Cost of marginal investment in Accounts Receivable: | | | | | | Total Variable Costs of annual sales = $43,803,000÷$1.5 * $0.5126 = | $ 14,968,945.20 | | | | Turnover of Accounts Receivable = 365÷27 = | 13.52 | | | | | AIARcurrent = $14,968,945÷ 13.52 = | $ 1,107,170.49 | | | | | | | | | | | | Proposed: | | | | | | | | | | | | | | Additional profit from sales = change in sales * contribution margin | | | | | = (.038 * $43,803,000)($1.5 - $0.5126) = | $ 1,643,541.12 | | | | | | | | | | | | Cost of marginal investment in Accounts Receivable: | | | | | | Total Variable Costs of annual sales = ($43,803,000*1.038)÷$1.5 * $0.5126 = | $ 15,537,765.12 |
b. What medium would you use to reach each of these parties and what would your relative resource allocation be to each?
4- The committee and Ms Beckel decided to include a religious studies curriculum in the program. The principal approved of it. However, Ms Wright one of the community members did not. She threatened to show up at the committee meeting with the media. On the day of the meeting, Ms Wright showed up with a placard protesting the use of the bible in public schools.
Sparkle Company is a Nigerian diamond mining company. Sparkle is a joint venture, 50 percent owned by Shine and 50 percent owned by Brighten. Both Shine and Brighten are U.S.-based companies with their functional currency being the American dollar. Sparkle Companies functional currency is that of Nigeria, being the Naira. During 2009, Sparkle had several transactions with its joint venture owners and outside parties. The details of Sparkle’s transactions are three loans, three expenditures, and one revenue stream. The loans the company took out were $1 million from Brighten, $1 million from Shine, and 300 million Naira from a local Nigerian bank. The expenditures
Analyzing the industry using Porter’s Five Forces, it can be seen that the Outdoor Apparel industry is very competitive. The threat of entry is very high, with several large conglomerates making acquisitions in the industry and established apparel companies such as Polo Ralph Lauren making expansions into sports apparel. With several brands such as North Face in the high end of the industry, as well as Columbia and several private labels dominating the middle and lower ends, a large number of substitutes are available. Buyers have large bargaining power, as end consumers could easily switch to another brand, while at the same time wholesalers are
Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week 2.
Although the fair value of the investment was lower than the amortized cost, the credit rating had been upgraded from BBB to BBB+, and the investment does not intend to be sold. These evidence show that the bond is expected to recover, so no other-than-temporary impairment has occurred.
This case is talking about an executive retreat. It was introduced by John Matthews who was a executive had been selected to attend the two-and-a-half-week retreat. The retreat was more like a competition about academic and athletic. The team members should not only get know each other and cooperate with teammates but also need to compete with others. The whole participants were broken into five groups and their aim was to win the competition. There are several sessions about academic and athletic that the participants should complete. After the introduction part the case showed the experience of John. Before the group meeting John was wondering and worried about this retreat. When he was taking the first group meeting, he tried to learn
The court deciphering between criminal negligence and recklessness. Criminal negligence being a person failing to perceive a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.
3. Seeing that the dispute involved the sale of land, specific performance is the proper award for damages to the injured party.
As mentioned in the introduction of the mini case, Hobby Horse Company, Inc. (HH) experienced a tough year in 2011. HH opened up a number of new stores but experienced a poor Christmas season. Christmas season is the biggest sale period for retail stores. As a result, bad Christmas sales performance played a big part of HH’s loss for year 2011. As we computed the financial ratios for HH, we can see the effects from new stores openings and poor sales performance.
On a snowy January evening, the Midwestern Medical Group (MMG) management team held a retirement party for Judith Olsen, MMG president. During the evening, Olsen reflected back on the years she had worked for MMG with mixed feelings about her experience. Over the course of their eight-year integration
Read Rush Johnson Farms Inc. v. Missouri Farms Association, 555 S.W.2d 61 and post a draft case study to the discussion board. Identify the Facts, Issue, Holding, Reasoning and Disposition. Case study #1 will be due week 3. This exercise will help you work through the reading a case prior to receiving a grade. Use the LEXIS NEXIS database through the Webster library to access the case.
Shakespeare Inc., a private publishing company issued its F/S on March 20, 2012. There were several accruals and events that the management of Shakespeare is considering to determine if they should be recognized or disclosed in Dec 31, 2011 F/S. In my opinion, the important things to focus on subsequent events are the period they effect and if their influence is material or not, so that in conclusion, the F/S are fairly presented.
Drilled and tapped based were forwarded to assembly by forklift truck, in wire-bound pallets holding bout 400 bases. This requires five forklift trips to move on "packet-release" quantity to assembly. (See question 1)
Several issues arose from a violent dispute at a bar between two American members of the Armed Forces that were stationed in another country. This dispute injured a waitress and led to the death of one of them, Private Meek. When the member of the Armed Forces was killed by the other, a violent crowd of locals appeared at the American Embassy in that country. This violent crowd caused the death of another individual which then caused employees to go in the defense of the Embassy and further produce several other deaths and injuries. This incident is very controversial because there was a crime committed at a local bar by foreigners that led to two more committed crimes by locals to that country, Hwat Nau.