Which of the following refers to the ability of a firm to buy repeatedly from a supplier on trade credit without re-applying for credit? Select one: a. Net terms b. Cash discount c. Open account d. Present value of delayed payment
Q: nts] Company X stockholders will decide on choosing one of the two following projects. Initial Cost…
A: Projects face different types of economic scenarios and cash inflows based on those scenarios. These…
Q: On January 31, 2021, Hanover Logistics, Inc., issued ten-year, 12% bonds payable with a face value…
A: Bond amortization is that concept under which company will issue the bond on discount and this…
Q: Blue Birds Inc., has a working capital of $1,410, current liabilities of $4,220, and inventory of…
A: In the given case, we have provided the working capital, current liabilities and the…
Q: A bond’s expected return is sometimes estimated by its yield to maturity (YTM) and sometimes by its…
A: Yield to maturity is an important concept. It tells the discount rate at that, the present value of…
Q: Columbus Corp. had $410,000 additions to retained earnings for the year. The firm paid out $190,000…
A: The PE ratio, or Price-to-Earnings ratio, is a financial measure that compares a company's stock…
Q: Stock Valuation (LO1) Suppose you know that a company's stock currently sells for $59 per share and…
A: Total return consists of two main components. They are capital gains yield and capital gains yield.
Q: Columbus Chicken has a debt-equity ratio of 1.1 and its return on assets is 8.9 percent, and total…
A: Debt equity ratio = de = 1.1Return on Assets = ROA = 8.9%Total Equity = e = $684,000
Q: Duo Corporation is evaluating a project with the following cash flows: Year ܘ ܝ ܢ ܚ ܟ ܗ 2 3 4 Cash…
A: To calculate the MIRR of the project using the discounting approach, the last years cashflow has to…
Q: Blue Birds Inc., has a working capital of $1,250, current liabilities of $4,410, and inventory of…
A: Quick ratio, also known as the acid-test ratio, is a financial metric that measures a company's…
Q: The following spreadsheet contains monthly returns for Cola Co. and Gas Co, for 2013. Using these…
A: Average monthly return is the mathematical average of all monthly returns given above.Rate of return…
Q: Luther Industries needs to raise $25 million to fund a new office complex. The company plans on…
A: The bond price is affected by the rating given to the bond. A superior rating for the bond means a…
Q: Use the average daily balance method to compute the finance charge on the credit card account for…
A: In the credit cards interest rate are charged on the basis of average daily balance of month that is…
Q: You want to withdraw $ 54,777 from your account at the end of one year and $ 10,521 at the end of…
A: As per the given information:Withdrawals at the end of the one year = $54,777Withdrawals at the end…
Q: The Digital Electronic Quotation System (DEQS) Corporation pays no cash dividends currently and is…
A: DDM stands for the Dividend Discount Model. It is a valuation method used to estimate the intrinsic…
Q: K For the credit card account, assume one month between billing dates (with the appropriate number…
A: The average daily balance is to be calculated by taking the sum of the multiples of the balance…
Q: Nash's Company purchased equipment for $18,030. By the current balance sheet date, $6,010 had…
A: Fixed asset, net is calculated as shown below.
Q: A firm has after-tax cash flow from operations equal to $100,000. Operating working capital…
A: Cash flow from operations=$100,000Change in working capital =$6,000Purchase of Fixed assets (Capital…
Q: ABC, Inc., invested in a machine with a useful life of 6 years and no salvage value. The machine was…
A: At the internal rate of return of 10%, the PV of annual cash inflows will equal the initial…
Q: you have $500000 saved for retirement. Your account earns 3.8% interest. How much will you be able…
A: The present value of an annuity refers to the current value of a series of equal cash flows or…
Q: 31. Bond ratings (S3.6) A bond's credit rating provides a guide to its price. In December 2020, Aaa…
A: Here,Yield of Aaa1.29%Yield of Baa3.11%Coupon Rate10%Time to Maturity in years5
Q: Give typing answer with explanation and conclusion to all parts Though limited, which of the…
A: Medicare is a federal health insurance program in the United States that provides coverage for…
Q: Use the unpaid balance method to find the finance charge on the credit card account. Last month's…
A: Here,Last Month Balance is $440Payment is $330Interest Rate is 19.20%Method is Unpaid Balance Method
Q: An insurance company issued a $90 million one-year, zero- coupon note at 8 percent add-on annual…
A: The duration of a bond represents the bond volatility. It represents the percent change in the…
Q: Explain what is meant when an organization has an Earnings at Risk (EaR) of $500,000 with 95%…
A: Introduction:Earning at Risk (EaR): It is the amount of change in net income that arises due to…
Q: Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The…
A: The NPV is a discounted cash flow method that takes into consideration the time value of money in…
Q: ABC requires P10,000,000 cash at the start of next year for ten years. The following were offered by…
A: The given details are:Amount needed by the company: P10,000,000The term structure, the face amount…
Q: Michael Sanchez purchased a condominium for $97,000. He made a 20% down payment and financed the…
A: Condominium cost = $97,000Down payment = 20%Loan period = 30 yearsInterest rate = 5%
Q: A person opens up a savings account that pays 4% interest compounded quarterly. The person makes…
A: Interest rate = 4% compounded quarterly Future value = $30,000 Quarterly payment, P = $200 Interest…
Q: Solving for Rates What annual rate of return is implied on a $2,100 loan taken next year when $4,800…
A: We often take loans from banks for different reasons and purposes.The bank charges us with interest…
Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…
A: The capital budgeting process is one that is helping the company to evaluate projects and then take…
Q: (Note: Use 365 days as the length of a year in all calculations.) The average DSO for Wok Bar Co.'s…
A: Credit management refers to the practices and strategies employed by companies to effectively manage…
Q: The S&P 500 is currently at 2888. The CBOE far-term VIX (^vif) is at 13.15, and the one-year LIBOR…
A: The Black-Scholes model assumes that financial markets are efficient and that the price of the…
Q: I would like help with the question. Please, use Descartes's rule for Net Cash flow and Norstrom's…
A: Norstrom's criterion is a method used in capital budgeting to determine the number of positive rate…
Q: A company is considering expanding its production line. Cost for the the equipment for the…
A: Free cash flows amount computation is done during capital budgeting process.Various adjustments are…
Q: How much money do you have to invest in order to accumulate a total of $4761 in 327 days if you are…
A: Invested amount refers to the present value of an investment made today as the money present today…
Q: [Venture Present Values] The TecOne Corporation is about to begin producing and selling its…
A: The present value represents the current worth of the future/expected stream of cash flow amount.
Q: You deposit $ 70,565 in your account today. You make another deposit at t = 1 of $ 51,167 . How much…
A: Time value of money is one of important concept being used in finance. As per this concept, a dollar…
Q: Company A can borrow money at a fixed rate of 9 percent or a variable rate set at prime plus 1…
A: Under the swap agreement two parties agree to interchange their borrowing that is to be done. When…
Q: Suppose Buyson Corporation’s projected free cash flow for next year is FCF1 = P150,000, and FCF is…
A: Value of firm refers to the total of all the outstanding securities including the common stock,…
Q: Milan Ltd. wants to purchase a new machine for its factory operations at a cost of £380,000. This…
A: A financial metric called Net Present Value (NPV) is used to evaluate a project's or investment's…
Q: We are evaluating a project that costs $1,080,000, has a life of 10 years, and has no salvage value.…
A: An accounting break-even point is where the firm generates a sales amount such that it is just able…
Q: 2. You are a U.S. investor and wish to buy 10,000 shares of Club Méditerranée ("Club Med"). You can…
A: The Bid price refers to the price that the broker pays to purchase the associated asset while the…
Q: 13) Find the future value of an annuity if you invest $2100 annually for 6.5 years at 4% compounded…
A: Annuity = $2100Interest rate = 4%Period = 6.5 years
Q: Crypto Corporation is a large, well-known public company that frequently issues securities, files a…
A: The Securities and Exchange Commission (SEC) that allows the company to offer and sell securities in…
Q: Fill in the missing numbers for the following income statement. (Do not round intermediate…
A: OCF is the operating cash flow is cash flow available from the operating the firm and this can be…
Q: 13. Bond Pricing (LO2) Consider a bond that has just paid a semi-annual coupon and has exactly 2.5…
A: Given: Annual coupon rate: 3.5% Semi-annual coupon rate: 3.5% / 2 = 1.75% Semi-annual yield: 4.2% /…
Q: The cost od the project is $2,100,000. It will produce future cash flows of $1,300,000 for 2 years.…
A: The Internal Rate of Return (IRR) of the project, we need to find the discount rate at which the net…
Q: Which of the following statements is incorrect? Question 6 options: Many large firms operate…
A: Ratio analysis is an important concept. It is used to assess the financial health of the companies.…
Q: Last year, Sally purchased a $1,000 face value corporate bond with an 11.2 percent annual coupon…
A: The formula to calculate bond price isBond price =Coupon*(1-(1+r)^(-n))/r +FV/(1+r)^n
Q: There are three securities in the market whose return on market portfolio yield the following…
A: In regression analysis, the term "yield" typically refers to the dependent variable or the variable…
Which of the following refers to the ability of a firm to buy repeatedly from a supplier on trade credit without re-applying for credit?
Select one:
a.
Net terms
b.
Cash discount
c.
Open account
d.
Present value of delayed payment
Step by step
Solved in 3 steps
- Explain the trade credit facility provided by some companies to their customers that allow them to manage their day-to-day liquidity situation and calculate the opportunity cost of an invoice that specifies the following conditions, as shown below (a. – c.):a) conditions: 1.25/10, n/30.b) conditions: 1.25/10, n/60.c) conditions: 1.5/10, n/60.Which of the following is indicative of discounts received from a supplier on account of early settlement of an amount owed as a result of a credit purchase? a) Quantity discount b) Value discount c) Early settlement discountIf the net present value associated with extending trade credit to a customer is positive, the selling firm should_______ ? Select one: O a. Ask him to buy from competitors O b. Not fill the order c. None of the options O d. Fill the order
- When a company decides to extend credit to consumers, it is making an investment decision in: a. Trade Credit b. Accounts Receivables c. Inventories d. Marketable SecuritiesWhich of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one specialWhich of the following statements is correct about credit period? A. If a customer purchases goods within the credit period, a cash discount will be allowed to the customer B. If a customer settles the payment within the credit period, a cash discount will be allowed to the customer C. It refers to the period in which customers must settle their debts due D. It refers to the period in which customers need to settle one-third of the debts in order to avoid further interests charged
- a) Explain in detail different types of documentation that the business would expect to change hands in purchase, sales, purchase returns and sales returns etc. b) Show the model of atleast one Credit Sales invoice, Purchase invoice, Debit note and Credit note. (you can use imaginary figure) c) What are policies for trade discount/cash discount, Is there any products are subject to trade discount and why? Explain the terms and conditions in detail.Kate Trading made an early payment to its suppliers to take advantage of the discount offered by the supplier. What account is most likely used for the discount that is being acquired by Kate Trading? cash discount trade discount sales discount purchase discountQuestion The average collection period is the average amount of time that elapses from a credit sale until the company can use the payment (collection) of the sale. True or false?
- Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…Main function of Letter of Credit (L/C) is to solve credit risk relating to the importer if the following explanation (or expression) is correct, please indicate "True". Or, if the following explanation (orexpression) is wrong, please indicate “False”.What is the effect of the following situations on the cost of accounts receivable financing? (A) A more thorough credit check is undertaken. (B) Receivables are sold without recourse CHOOSE THE LETTER OF CORRECT ANSWERA. (A) Increase; (B) DecreaseB. (A) Decrease; (B) IncreaseC. (A) Decrease; (B) DecreaseD. (A) Increase; (B) IncreaseE. (A) Increase; (B) No effect
