Answer:
a) The time that elapses between invoicing and payment in terms of days:
= 55 days (54.7)
b) Annual Holding Cost of Inventory = $450,000.
Explanation:
a) Data and Calculations:
Average Accounts Receivable = $45 million
Worth of PCs manufactured = $300
Period of days in a year = 360 days
Accounts receivable turnover ratio = Net Sales/Average Receivable
= $300/$45 = 6.67
Accounts receivable days = 365/6.67 = 55 days
Annual holding cost of inventory:
= Average accounts receivable * Interest rate
= $45,000,000 * 10%
= $450,000
Answer: organizations that are in the middle of a series of organizations that distribute goods from producers to consumers.
Explanation:
Intermediaries are the middlemen in the distribution chain that purchases from one party and then sells to another party.
They're the organizations that are in the middle of a series of organizations that distribute goods from producers to consumers. Intermediaries can also hold stock and carry out marketing and logistics functions for the manufacturers.
Answer:
$395,000
Explanation:
Bad Debt expense:
= 1.5% of sales will be uncollectible
= 1.5% × $1,000,000
= 0.015 × $1,000,000
= $15,000
Allowance for Doubtful accounts:
= Bad Debt expense - accounts receivable written off
= $15,000 - $10,000
= $5,000
Net realizable value:
= Accounts receivable - Allowance for Doubtful accounts
= $400,000 - $5,000
= $395,000
Answer:
$32
Explanation:
Use dividend discount model (DDM) to calculate the price of the stock;
Price(P0) = D1/(rs - g)
whereby,
P0= Current price or current value of stock
D1 = Next year's expected dividend
rs = required rate of return
g = expected dividend growth rate (which is declining, so -0.04)
D1 = D0(1+g)
D1 = $6(1+-0.04) = $6 * 0.96 = $5.76
P0 = 5.76/(0.14 +0.04)
P0 = 32
Therefore, the value of Brushy Mountain’s stock is $32
