INFLATION KEEPS YTL BUDGET TIGHTTHE STAR BUSINESS NEWS 4 Jun 2014KUALA LUMPUR: YTL Corp Bhd is not buying any assets at the moment due toinflationary pressure, says group managing director Tan Sri Dr Francis Yeoh. "Theenvironment is very difficult for YTL to buy assets, because all these assets are inflated," hesaid. "From 2008 till today there is nothing major that we can acquire," he said at the GlobalMalaysia Series talk yesterday. He explained that the United States and the Europeancountries had introduced inflation to the world but not in their own economies, by printing99money. Warning that the global bubble would burst within two to four years, he said that thiswould be the first government-led bubble created by the US and European governments.XETRACH10305- 003QUELYDoreTAN SRI FRANCIS YEOHMANAGING DIRECTOR, YTL CORPORATIONCoutex he Ban A erVEL. 770"If you want high wages to keep up with inflation but without increasing productivity, you'regoing to have a problem," Yeoh said, adding that sovereign funds in Asia should be investingin infrastructure development to boost productivity. He said Asia had a high savings level buthad not used it yet to build the amount of infrastructure needed. Yeoh declined to commentwhen asked about the direct-tender award by the Energy Commission (EC) to YTL PowerInternational Bhd for the development of 1,000MW-1,400MW power plant in Pasir Gudang,Johor. YTL Power, a wholly-owned subsidiary of YTL Corp, announced yesterday that it hadreceived a letter of award from the EC to develop a combined-cycle power plant..The proposed combined-cycle gas turbine power plant, which is a fast-track developmentknown as Project 4A, was awarded to SIPP Energy Sdn Bhd, with the participation of YTLPower and Tenaga Nasional Bhd as consortium members. It was reported that SIPP Energy islinked to the Sultan of Johor. The move to offer the conditional offer came about after the ECdecided that there was a requirement to fast-track the construction of the plant that wasscheduled to be operational in 2018.(exoomt) Questions:YTL did not buy property during inflationary period. Identify the reasonsgiven by Tan Sri Dr. Francis Yeoh for not buying property by YTL duringinflationary period1.2. Productivity does not increase when wages (salary) increased during inflation.Assess the statement with examples3. Compare and contrast a scenario when the rate of productivity could beincreased higher than the rate of increase in wages to the workers (youranswer should not be less than 500 words)

As per our protocol we provide solution to the one question only but you have asked three questions…

Answered: YTL did not buy property during…

YTL did not buy property during inflationary period. Identify the reasons given by Tan Sri Dr. Francis Yeoh for not buying property by YTL during inflationary period

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 5P: Relaxing Collection Efforts The Boyd Corporation has annual credit sales of 1.6 million. Current...

See similar textbooks

Similar questions

Jem Jewelers has seasonal financing needs that vary from P250,000 to P2,725,000. The permanent financing requirement is P4,100,000. Indicate the appropriate strategy for each situation wheter it is AGGRESSIVE FINANCING or CONSERVATIVE FINANCING. a. Due to high inflation , short- term interest rates are much higher than long-term ratesb. Sales revenue is unpredictablec. The firm has large proportion of fixed assets in its total assetsd. The average seasonal financing need is P1,000,000e. The average seasonal financing nedd is P2,000,000
Relaxing Collection Efforts The Boyd Corporation has annual credit sales of 1.6 million. Current expenses for the collection department are 35,000, bad-debt losses are 1.5%, and the days sales outstanding is 30 days. The firm is considering easing its collection efforts such that collection expenses will be reduced to 22,000 per year. The change is expected to increase bad-debt losses to 2.5% and to increase the days sales outstanding to 45 days. In addition, sales are expected to increase to 1,625,000 per year. Should the firm relax collection efforts if the opportunity cost of funds is 16%, the variable cost ratio is 75%, and taxes are 40%?
A firm is considering several policy changes to increase sales. It will increase inventory by $10,000 it will offer more liberal sales terms but will result in average receivables increasing by $65,000. These actions are expected to increase sales by $800,000 per year, and cost of goods will remain at 80% of sales. Because of the firm’s increased purchase of its won production needs, average payable increases by $35,000.What factors should they consider when making these decisions? What effects would they have on the firm’s cash cycle? Please select three financial ratios they should consider and why
An International company called Larsen & Toubro (L&T) on 26.3.2019 announced that it had won a contract for a coke calciner project at Sohar Industrial Estate in Oman. They did not bid for many projects in 2019 in the GCC region due to capital rationing. The reason for hard capital budgeting will not include the following Poor track record Desire for limited investment options Poor management team Industry-wide factors
A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $12,000. It will offer more liberal sales terms, but this will result in average receivables increasing by $69,000. These actions are expected to increase sales by $820,000 per year, and cost of goods will remain at 80% of sales. Because of the firm’s increased purchases for its own production needs, average payables will increase by $37,000. What effect will these changes have on the firm’s cash cycle? (Use 365 days in a year. Do not round your intermediate calculations. Round your answer to 2 decimal places.) Change in cash cycle days
Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 5% from 10,000 to 10,500 units during the coming year; the average collection period is expected to increase from 40 to 55 days; and bad debts are expected to increase from 2% to 4% of sales. The sale price per unit is $39, and the variable cost per unit is $29. The firm's required return on equal-risk investments is 9.4%. Evaluate the proposed relaxation, and make a recommendation to the firm. (Note:Assume a 365-day year.) a. the cost from the increased marginal investment in A/R is? (round to nearest dollar) b. the cost from an increase in bad debts.? (round to nearest dollar) c. compute the net profit from the proposed plan.
PROBLEM The management of the Book Warehouse Company wishes to apply the Miller-Orr model to manage its cash investment. They have determined that the cost of either investing in or selling marketable securities is $100. By looking at Book Warehouse’s past cash needs, they have determined that the variance of daily cash flows is $20,000. Book Warehouse’s opportunity cost of cash, per day, is estimated to be 0.03%. Based on experience, management has determined that the cash balance should never fall below $10,000. 4. How much is the variance of daily cash flows?(Use a number, no decimal value, no commas, no currency, no space) * 5. How much is the lower limit based on the Miller-Orr model of cash management? (Use a number, no decimal value, no commas, no currency, no space) * 6. How much is the opportunity cost of cash, per day? (Use a number, must be in decimal form. eg. 6.3%/100, encode 0.063 , no commas, no currency, no space) * PLEASE ANSWER ALL QUESTIONS. THANKS!
Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 20% from 10,000 to 12,000 units during the coming year; the average collection period is expected to increase from 30 to 45 days; and bad debts are expected to increase from 1% to 3% of sales. The sale price per unit is $45, and the variable cost per unit is $34. The firm's required return on equal-risk investments is 10.3%. Evaluate the proposedrelaxation, and make a recommendation to the firm. (Note: Assume a 365-day year.)
You are the financial controller of Pack West (Pty) Ltd. Your company is experiencing difficulties with their cash flows owing to the Covid-19 uncertainty. At the end of April 2022, you noticed that the total sales of the company keep decreasing while the total cost are relatively stable, and you are worried that the company will not have sufficient funds to pay the salaries of R50 000 for April.You have the following historical information at your disposal:Total sales were R125 000 in January, R115 000 in February, and R110 000 and R95 000 for March and April, respectively. Historical information shows that 70% of the total sales are for cash and the debtors pay as follows:50% of the total debt one month after the sale, 30% in the following month and 20% in the third month after the sale.The total purchases for January were R100 000, R110 000 in February, and R100 000 and R105 000 for March and April, respectively. 30% of the total purchases are paid in cash and the rest of the…
The Blue Company has under study a new credit policy that they believe will increase annual sales from P11 million to P14 million. However, the new plan is also expected to increase bad debt losses from P800,000 to P1.2 million each year. The average collection period on collectible sales is now averaging 90 days. This ratio will increase to 120 days for both old and new slaes if the new credit policy is adopted. The increase in sales is expected to increase the company's investment in inventory by P20,000. Assuming a pre-tax reuired rate of return of 25% and a variable cost-to-sales ration of 60%, should the Blue Company adopt the new credit policy? Assume a 360-day year.
5. A. Anthony & Sons Concrete Company has been offered by its bank to manage its cash at a cost of $35,000 per year. Under the proposed cash management, the firm can reduce the cash required on hand by $180, 000, Since the bank is also doing a lot of record keeping, the firm's administrative cost would decrease by $2, 000 per month. What recommendation would you give the firm with respect to the proposed cash management assuming the firm's opportunity cost is 12 percent?
Recall that if the economy continues to be strong, Carson Company may need to increase its production capacity by about 50 percent over the next few years to satisfy demand. It would need financing to expand and accommodate the increase in production. Recall that the yield curve is currently upward sloping. Also recall that Carson is concerned about a possible slowing of the economy because of potential Fed actions to reduce inflation. It needs funding to cover payments for supplies. It is also considering the issuance of stock or bonds to raise funds in the next year a. At a recent meeting, the Chief Executive Officer (CEO) stated his view that the economy will remain strong, as the Fed's monetary policy is not likely to have a major impact on the interest rates. So he wants to expand the business to benefit from the expected increase in demand for Carson's products. The next step would be to determine how to finance the expansion. The Chief Financial Officer (CFO) stated that if…