Read each question carefully, make sure to answer all questions are answered and show your work.

2. A firm has revenues of $8,000,000 and COGS = 50% of revenues. Receivables = $800,000, Inventory = $500,000, and Payables = $300,000. What is days inventory held?

A. 36.5 Days B. 45.6 Days C. 27.4 Days D. 54.7 Days

3. Use the following information to determine the implied inventory holding cost:

EOQ = 95 units

Demand = 350 units

Fixed Ordering Costs = $5

A. $0.39 B. $12.50 C. $2.58 D. $2.56

4. A credit analyst has received a $20,000 order from a new customer. The cost of filling the order (i.e., COGS) is $19,100 and collection costs are $500. The credit analyst notes that the COGS will be paid immediately. Further, it is assumed that the customer will repay the trade credit obligation in 90 days. It is also assumed that the collection costs will be incurred in 90 days. If the appropriate discount rate is 10%, what is the NPV of extending credit to the new customer?

A. $400.00 B. -$157.25 C. $69.25 D. -$69.25