Financial management question

Problem Set Managing Current Assets Question 1 A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it pays after 67 days. What is the nominal annual cost of not taking the discount? (Assume a 365-day year.) Question 2 Fiesta Taco Company purchases 10,000 boxes of ground beef each year. It costs $10 to place each order and $5.00 per year for each box held as inventory. a. What is the average inventory held during the year? b. What is the economic order quantity for the ground beef? c. How many orders will be made each year? Question 3 Birdie Sdn Bhd imports and markets special floating golf balls to various clients throughout Malaysia. The company is reviewing its purchasing policy. It expects to sell 624,000 balls next year. The cost price of each ball is RM2.40 and is sold in dozens. Storage and other carrying cost are estimated at RM0.10 per ball. Ordering cost is RM20 per order. The delivery time is two weeks and safety stock level is 12,000 balls. The demand for such balls per year is about 52,000 dozens. Calculate: (A) The optimal economic order quantity. (B) The annual inventory cost for the company if it orders in this quantity. (C) The re-order level. Question 4 Sapura TEL Sdn. Bhd. is a company selling deluxe cordless telephone. It sells the telephone for RM79.95 which costs RM40 each. Last year the company sold 85000 units. The supplier of the telephone is its subsidiary Sapura COM Sdn. Bhd. which recently announced a price increase of RM5. This will force Sapura Tel to increase the selling price to RM84.95 but anticipate that the demand for the telephone for this coming year to decline by 10 percent. It costs Sapura TEL RM400 to place an order and the carrying costs of the deluxe telephone are 12% of costs. The supplier has also indicated that due to increase in processing costs, it will accept orders only in round lots of 1000 units at the quoted price of RM45. An additional charge of RM50 per order is made on any fractional order. REQUIRED: a. Compute the economic order quantity. b. Compute the total costs of inventory if the EOQ is ordered. C. Compute the total costs of inventory if each order is rounded to the nearest round lot of 1000 units. d. What order size should the company place? Question 5 Spartan Sporting Goods has $5 million in inventory and $2 million in accounts receivable. Its average daily sales are $100,000. The company's payables deferral period (accounts payable divided by daily purchases) is 30 days. What is the length of the company's cash conversion cycle