a) Yeasmin Sdn. Bhd's financial statement information is given hereunder in the table: Item Inventory Accounting...

 

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a) Yeasmin Sdn. Bhd's financial statement information is given hereunder in the table: Item Inventory Accounting receivables Accounts payable Beginning (RM), 2017 11,780 5,320 7,536 Ending (RM), 2017 13,380 6,070 7,999 Credit sales for the period just ended were RM90,750 and costs of goods sold in 2017 were RM66,284. Other expenses are expected to be RM15,000 per month. Assume a 365-Day' year. Calculate the Operating Cycle (OC) and Cash Cycle (CC) of the Yeasmin Sdn. Bhd. for the year 2017. How do you interpret your answer? (10 marks) b) You have recently been appointed as a Chief Financial Officer of Papri Sdn. Bhd. You are asked to discuss the following in the coming top management committee meeting: 'Short-term Financial Policy', 'Carrying Costs Vs. Shortage Costs', and 'Cash Budget'. (9 marks) c) Blue Occean Berhad is analyzing the possible acquisition of Chan Sdn. Berhad. Both firms are unlevered. The forecasts of Blue Occean Berhad show that the purchase would increase its annual after-tax cash flow by RM 365,000 indefinitely. While the current market value of Chan Sdn. Berhad is RM 12 million, the current market value of Blue Occean Berhad is RM 21 million. The appropriate discount rate for the incremental cash flows is 10 percent. Blue Occean Berhad is trying to decide whether it should offer 30 percent of its stock or RM20.5 million in cash to Chan Sdn. Berhad. As a Chief Financial Officer, you are asked to answers the following: i) What is the synergy from the merger? ii) What is the purchase price to Blue Occean of each alternative? (3 marks) a) Yeasmin Sdn. Bhd's financial statement information is given hereunder in the table: Item Inventory Accounting receivables Accounts payable Beginning (RM), 2017 11,780 5,320 7,536 Ending (RM), 2017 13,380 6,070 7,999 Credit sales for the period just ended were RM90,750 and costs of goods sold in 2017 were RM66,284. Other expenses are expected to be RM15,000 per month. Assume a 365-Day' year. Calculate the Operating Cycle (OC) and Cash Cycle (CC) of the Yeasmin Sdn. Bhd. for the year 2017. How do you interpret your answer? (10 marks) b) You have recently been appointed as a Chief Financial Officer of Papri Sdn. Bhd. You are asked to discuss the following in the coming top management committee meeting: 'Short-term Financial Policy', 'Carrying Costs Vs. Shortage Costs', and 'Cash Budget'. (9 marks) c) Blue Occean Berhad is analyzing the possible acquisition of Chan Sdn. Berhad. Both firms are unlevered. The forecasts of Blue Occean Berhad show that the purchase would increase its annual after-tax cash flow by RM 365,000 indefinitely. While the current market value of Chan Sdn. Berhad is RM 12 million, the current market value of Blue Occean Berhad is RM 21 million. The appropriate discount rate for the incremental cash flows is 10 percent. Blue Occean Berhad is trying to decide whether it should offer 30 percent of its stock or RM20.5 million in cash to Chan Sdn. Berhad. As a Chief Financial Officer, you are asked to answers the following: i) What is the synergy from the merger? ii) What is the purchase price to Blue Occean of each alternative? (3 marks)

Answer rating: 100% (QA)

Answer a Operating Cycle OC and Cash Cycle CC Calculation 1 Inventory Conversion Period ICP ICP Ending Inventory Beginning Inventory 2 Cost of Goods S... View the full answer