Fundamentals of Corporate Finance (12th Edition)

Chapter 20

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The accounts receivable period is the number of ... more

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50.73 % ; Calculate the number of days for the ... more

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Minimize cost. ; If a company can maintain a low ... more

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Trade credit is most commonly offered in the form ... more

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The costs associated with carrying receivables are... more

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The five C’s of credit are the following:... more

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The factors that determine the length of the ... more

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The different types of inventory are:Raw ... more

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For the company that migrates to JIT inventory ... more

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The firm keeps little inventory on hand since the ... more

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Company D benefits from having a shorter inventory... more

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$2,608,222 ; Compute the receivables turnover by ... more

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$103,242.81 ; Compute the amount of daily sales (... more

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Annual credit sales are $625,781.54.Receivables ... more

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The average accounts receivable of the company are... more

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$800,682.74 ; Compute the average collection ... more

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The company should proceed with the new policy. ... more

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No, the inventory policy of the company is not ... more

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Carrying cost = $7,650 Restocking cost = $6,760 ... more

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The formula to calculate carrying costs:  The ... more

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Since the NPV of the decision to switch is ... more

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Since the NPV of the decision to switch is ... more

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Since the net savings are positive, the company ... more

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3,176.17 ; Identify the information required to ... more

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$82.55 ; Identify the information required to ... more

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$133.60 ; Identify the information required to ... more

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Orders per year = 72.8The next order should be ... more

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Since the NPV of the credit decision is positive, ... more

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Since the NPV of the credit decision is positive, ... more

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Option 3 gives the maximum benefit. ; The excess ... more

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Yes, it is plausible.This is because the overall ... more

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No, the change is not a good idea because the NPV ... more

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Formula to compute old cash flow:  Formula to ... more

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