Circle the correct answer in each question 1. Your firm generally receives 5 checks a month. The check amounts and the collection delay for each check is shown below. Given this information what is the amount of the average daily float? Assume a 30 day month. 

A. $1,788.24 B. $2,523.33 C. $3,716.67 D. $6,080.00 E.. $8,941.18 

2.Firm A wants to borrow upto $350000 from a bank at 15% p.a. There is a compensating balance requirement of 10%. What is the effective annual rate ? a. 17.7% b. 17.5% c. 15.9% d. 16.7% 

3.Firm A is considering the use of a lock-box system. The firm’s average check receipt is $150. The company invests excess cash in money market and earns 8% p.a. The lock-box system will speed up collection by 2.5 days. What is the maximum per check processing cost payable by the firm? a. $0.083 b. 0.30 c.4.8 d.0.03 

4. Firm A on average needs 60 days to collect its receivables. Sales revenues of the last and current quarters are 45 and 60 million dollars, respectively. What is the outstanding amount of receivables (million dollars) at the beginning of the next quarter? a. 50 b. 20 c. 30 4. 40 

5. Given the following information, please compute the cash cycle of the firm. Beginning Balance Ending Balance Inventory 6650 8500 Accounts receivable 3250 5550 Accounts payable 4850 5050 Credit sales 78390 Cost of goods sold 63400 a. 51.62 days b. 48.97 days c. 15.12 days d. 35.60 days e. 60.48

 

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Status NEW Posted 18 Jun 2017 08:06 AM My Price 3.00

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A-----------nsw-----------er ----------- 1.----------- B.----------- 25-----------23.-----------33 -----------Wor-----------kin-----------gs:----------- =-----------(15-----------00*-----------7+4-----------600-----------*4+-----------630-----------0*2-----------+81-----------00*-----------3+9-----------900-----------*1)-----------/30----------- = -----------252-----------3.3-----------3 ----------- 2.----------- d.----------- 16-----------.7%----------- Wo-----------rki-----------ng:----------- 15-----------% /----------- (1----------- - -----------.10-----------) =----------- 16-----------.7%----------- -----------3. -----------a. -----------0.0-----------83 -----------Wor-----------kin-----------gs:----------- =-----------150-----------*0.-----------08*-----------2.5-----------/36-----------5 =----------- 0.-----------083----------- -----------4. -----------d. -----------40 -----------Wor-----------kin-----------gs:----------- 60-----------*60-----------/90----------- = -----------40 ----------- 5-----------. c-----------. 1-----------5.1-----------2 -----------

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