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3 years ago

What are the advantages of collecting payment at the time of service?

1 answer:

8 0

Your business can make a profit but still not have enough cash on hand if you don’t collect payment at the time of service. At one given time, you may not have enough cash to pay your bills or payroll, Collecting payment at the time of service will ensure that you have enough cash coming in when you need to pay cash out.

The best example is hospitals. These days, insured patients are no longer allowed to walk out of the hospital without paying because of high administrative costs and low collection rates.

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J Corp. common stock is priced at $36.50 per share. The company just paid its $0.50 quarterly dividend. Interest rates are 6.0%.

viva [34]

Answer:

Explanation:

The time (T) = 6 months = 6/12 years = 0.5 years

Interest rate (r) = 6% = 0.06

The stock is priced [S(0)] = $36.50

The price the stock sells at 6 months ( $V_c$ ) = $3.20

European call (K) = $35

The price (P) is given by:

$P=V_c+K.e^{-rT}-S(0)+Dividends\\But, Dividends = 0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Therefore, P=V_c+K.e^{-rT}-S(0)+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Substituting:\\P=3.2+35*e^{-0.06*0.5}-36.5+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\P=3.2+33.9656-36.5+0.4926+0.4852\\P=1.64$

The price of a 6-month, $35.00 strike put option is $1.65

5 0

3 years ago

Which of the following statements is not accurate descriptions of the business market? Mrs. Phillip, a retail buyer for Blooming

Natali [406]

Answer:

Mrs. Phillip, a retail buyer for Bloomingdale's, does all the shopping for her family at the same store.

Explanation:

The business market is the market where you can sell your product and services to the other businesses so it can be used as a raw material for the other business in order to manufacture the products. And, the other reason is to purchased the products and resell them.

So based on the given statements, the first option is considered as in the remaining statements there are business transactions but in this only one person i.e. retail buyer is considered

8 0

3 years ago

"The objective of external auditing is to provide opinions on the reliability of the financial statements and provide opinions o

muminat

Answer:

A. True

Explanation:

4 0

3 years ago

Unimart Precision Manufacturing

Anarel [89]

Answer:

Results are below.

Explanation:

Giving the following information:

Company 1:

Beginning inventory Merchandise $253,000

Cost of purchases 600,000

Ending inventory Merchandise 153,000

Company 2:

Beginning Finished goods $506,000

Cost of goods manufactured 930,000

Ending Finished goods 147,000

To calculate the cost of goods sold, we need to use the following formula:

COGS= beginning finished inventory + cost of goods manufactured/purchased - ending finished inventory

Company 1:

COGS= 253,000 + 600,000 - 153,000

COGS= $700,000

Company 2:

COGS= 506,000 + 930,000 - 147,000

COGS= $1,289,000

7 0

3 years ago

Sustainable Growth Rate You have located the following information on Rock Company: debt ratio = 46.5%, capital intensity ratio

Sliva [168]

Answer:

The correct answer is 10.72% ( Approx.).

Explanation:

According to the scenario, the given data are as follows:

Debt ratio = 46.5%

Capital intensity ratio = 2.51 times

Profit margins = 21%

Dividend payout = 38%

Formula to calculate sustainable growth rate ae as follows:

Sustainable growth rate = (Earnings retention rate × Return on equity ) / ( 1 - (ROE × RR)

where, Retention rate =(1 - dividend payout rate)

= (1-0.38) = 0.62

ROE = Profit margin × Total asset turonver × Equity multipler

= Profit margin × 1/capital intensity ratio × 1/(1-debt ratio)

= .21 × (1/2.51) × 1/(1-.465)

= .21 × 0.398 × 1.869

= 0.1562

=15.62%

So, Sustainable growth rate = (0.1562*0.62) / 1 - (0.1562*0.62)

= 0.096844 / 0.903156

= 0.1072

= 10.72% (approx.)

Hence, the correct answer is 10.72% (approx.).

7 0

3 years ago