Showing 71 to 80 of 175 Questions
  • Speculate on the nature of the relationship between the credit and collections department and the sales department at Wachusett Window in the last two questions.

  • Wildebrant Inc. runs out of inventory all the time both in the factory and at the point of sale. However, the company is profitable, and no one worries about it much. Is this OK? What’s probably going on that management doesn’t see? Why don’t they see it? What would you suggest to fix the problem? How would it work?

  • Scherbert Industries has the following balance sheet accounts as of 12/31/X3 (not a complete balance sheet):Accounts Payable ...............$ 650,000Accounts Receivable .............845,000Accruals ..................257,500Cash ...................137,200Common Stock .............1,200,000Fixed Assets (net) ............8,250,000Inventory .

  • Thompson Inc. has a $10 million revolving credit agreement with its bank. It pays interest on borrowing at 2% over prime and a .25% commitment fee on available but unused funds. Last month Thompson had borrowings of $5 million for the first half of the month and $10 million for the second half. Calculate its interest charges for the month

  • The Conejo Corp. borrows from its bank under an $8 million revolving credit arrangement. It pays a base rate of 9% on its outstanding loan plus a .25% commitment fee on the unused balance. The firm had borrowed $2 million going into April and borrowed an additional $4 million on April 11. No further borrowing or repayment was made during

  • The Grass Ridge Company has the following current asset accounts.Cash ...............$1,900,000Accounts Receivable .........4,600,000Inventory ...............5,500,000Its current ratio is 2.5:1. The bank is willing to lend the company enough to finance its working capital needs under a $10 million revolving credit arrangement at a base ra

  • Bridgeport Inc. has a $30 million revolving credit agreement with its bank at prime plus 3.2% based on a calendar year. Prior to the month of April, it had taken down $15 million that was outstanding for the entire month. On April 10, it took down another $5 million. Prime is 8.2%, and the bank’s commitment fee is .25% annually. Calcula

  • Southport Inc. has an inventory turnover of 10×, an ACP of 45 days, and turns over its payables once a month. How long are Southport’s operating and cash conversion cycles? (Use a 360-day year.)

  • The Langley Corporation is in a seasonal business. It requires a permanent base of net working capital of $10 million all year long, but that requirement temporarily increases to $20 million during a four-month period each year. Langley has three financing options for net working capital.a. Finance the peak level year round with equity, w

  • Calculate the effective interest rate implied by the following terms of sale. (Use a 365-day year.)2/10 301/5 15.5/10 302.5/10 251/5 20