. Under a factory savings plan, a workman deposits P 50 at the beginning of each month for four years and the management guarantees accumulation at 6% compounded monthly. How much stands to the work man’s credit at the end of 4 years.
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25. Under a factory savings plan, a workman deposits P 50 at the beginning of each month for four years and the management guarantees accumulation at 6% compounded monthly. How much stands to the work man’s credit at the end of 4 years.
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- Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.Under a factory savings plan, a workman deposits P 25 at the beginning of each month for 4 years, and the management guarantees accumulation at x% compounded monthly. If the workman's credit at the end of 4 years amount to P 1,359, what is the value of x?An employee borrows P50,000 for seven months at an interest rate of 12% per year. Find the interest earned and the total amount he has to pay
- The president of a growing engineering firm wishes to give each of 50 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate, compounded quarterly, so that each employee will receive a $1,200 bonus? A.$3,945 B.$3,844 C.$2,075 D.$4,734The president of a growing engineering firm wishes to give each of 20 employees a holiday bonus. How much needs to be deposited each monthfor a year at a 12% nominal rate, compounded monthly, so that each employee will receive a $2,500 bonus? a. $2,070 b. $3,840 c. $3,940 d. $4,170.Mr. Samal deposits 5,000 php at the end of each month at a product with an interest rate of 8% compounded monthly. How much is the present value of his savings at the end of the 8th month? (A) 40,000 php B)28.733.19 php C)33,314.92 php D)38,826.19 php
