Question: What should be entered into part A: Years 1 - Infinity: i have the admin costs, there are no bad debts, but what is the

What should be entered into part A: Years 1- Infinity: i have the admin costs, there are no bad debts, but what is the contribution margin, the tax on above and the total cash flow. Also, there is a part B that asks for the Net Present Value: i need to know the present cash inflows, the present cash outflows, and what the PMT,(N=9999), I/YR, and PV is so that I can calculate the NPV. I would appreciate these answers so I could continue on to parts C and D. Thank You ( I have all the answers for Part A detailed support of the above numbers, im just not sure where to plug them in at. thank you for your help
A company with annual sales of $24,000,000 is considering changing its payment terms from net 40 to net 30 to encourage customers to pay more promptly. The company forecasts that customers would respond by paying on day 34 rather than day 44 as at present (assume 360 a day year) but would decrease their purchases by $450,000 per year. The company also forecasts that its idle cash balance would decrease by $40,000 and administrative costs would be reduced by $35,000 per year. The company's variable costs average 66% of sale: it is in the 35% marginal tax bracket, and it has an 9% cost of capital.
Required:
A. Calculate the incremental cash flows associated with accepting this proposal, and
organize your cash flows into a cash flow spreadsheet of the type demonstrated in
chapter 12 of the textbook.
B. Calculate the proposal's Net Present Value.
C. Calculate the proposal's Internal Rate of Return.
D. Calculate the proposal's Net Annual Benefit.
E. Explain whether the firm should shorten its payment terms or not.
Your answers to this open-ended assignment should be
placed in the space below this line.
Detailed support for above numbers:
Other W/C change (given in problem)
Other W/C change (given in problem)
B Present value of cash inflows
Present value of cash outflows
Net present value
C Annual cash outflow
Investment in A/R
Internal rate of return
D Allowed annual cost
Actual annual cost
Net annual benefit
E Double click and put your answer here.
What should be entered into part A: Years 1 -

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