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neonofarm [45]
3 years ago
12

Which of the following statements is CORRECT? Select one: a. In managing a firm's accounts receivable, it is possible to increas

e credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period (its DSO) sufficiently. b. Because of the costs of granting credit, it is not possible for credit sales to be more profitable than cash sales. c. Since receivables and payables both result from sales transactions, a firm with a high receivables-to-sales ratio must also have a high payables-to-sales ratio. d. Other things held constant, if a firm can shorten its DSO, this will lead to a higher current ratio. e. A firm that makes 90% of its sales on credit and 10% for cash is growing at a constant rate of 10% annually. Such a firm will be able to keep its accounts receivable at the current level, since the 10% cash sales can be used to finance the 10% growth rate.
Business
1 answer:
alexgriva [62]3 years ago
3 0

Answer:

a. In managing a firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period (its DSO) sufficiently.

Explanation:

It is possible to increase the credit sales without even increasing the accounts receivables, we will only have to shorten the Days sales outstanding.

mathematically:

DSO = Accounts receivables / Annual sales / 365

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An investment offers $6,400 per year for 15 years, with the first payment occurring one year from now. If the required return is
yawa3891 [41]

Answer:

PV= $62,158.4

Explanation:

Giving the following information:

Annual payment= $6,400

Number of periods= 15 years

Interest rate= 6% = 0.06

<u>First, we need to calculate the future value using the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= annual payment

FV= {6,400*[(1.06^15) - 1]} / 0.06

FV= $148,966.21

<u>Now, the present value:</u>

PV= FV/(1+i)^n

PV= 148,966.21 / (1.06^15)

PV= $62,158.4

4 0
3 years ago
The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner.
Butoxors [25]

Answer:

a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is<u> falling </u>and the marginal cost of cheeseburger production is <u>rising</u>.

b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is <u>  rising </u> and the average total cost of cheeseburger production is <u>at a minimum</u>.

Explanation:

a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is<u> </u><em><u>falling </u></em>and the marginal cost of cheeseburger production is <em><u>rising</u></em>.

From the table in the question, it can be observed that the average total cost of production at a quantity of 30 cheeseburgers per hour is higher than the average total cost of production at a quantity of 40 cheeseburgers per hour, while the average total cost of production at a quantity of 50 cheeseburgers per hour is lower than the average total cost of production at a quantity of 40 cheeseburgers per hour. This implies that at a quantity of 40 cheeseburgers per hour, the average total cost of production is<u> falling.</u>

Also from the table in the question, it can be observed that the marginal cost of production at a quantity of 30 cheeseburgers per hour is lower than the marginal cost of production at a quantity of 40 cheeseburgers per hour, while the marginal cost of production at a quantity of 50 cheeseburgers per hour is higher than the marginal cost of production at a quantity of 40 cheeseburgers per hour. This implies that at a quantity of 40 cheeseburgers per hour, the marginal cost of production is<u> rising.</u>

b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is <u> </u><em><u> rising</u></em><u> </u> and the average total cost of cheeseburger production is <em><u>at a minimum</u></em>.

From the table in the question, it can be observed that the average variable cost of production at a quantity of 50 cheeseburgers per hour is lower than the average variable cost of production at a quantity of 60 cheeseburgers per hour, while the average variable cost of production at a quantity of 70 cheeseburgers per hour is higher than the average variable cost of production at a quantity of 60 cheeseburgers per hour. This implies that at a quantity of 60 cheeseburgers per hour, the average variable cost of production is<u> rising.</u>

Also from the table in the question, it can be observed that the average total cost of cheeseburger production at quantities of 50 and 60 cheeseburgers per hour are equal and the lowest on the table, this implies that the average total cost of cheeseburger production is <u>at a minimum</u> at a quantity of 60 cheeseburgers per hour.

7 0
2 years ago
Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm’s t
posledela

Answer:

Based on the DuPont equation and given information, ROE of Harrington Inc is 13.818%.

Explanation:

We have to find the total equity and total debt of Harrington Inc in order to apply the DuPont equation for finding ROE because net income, sales of Harrington Inc. are already given.

- To find Harrington Inc's total debt, apply the Debt-to-capital formula: The Harrington Inc's total debt/The Harrington Inc's total capital = 45% =>  Harrington Inc's total debt = The Harrington Inc's total capital * 45% = $250,000 x 45% = $112,500;

- To find Harrington Inc's total equity, apply the accounting equation Asset = Liabilities + Owner's Equity: The Harrington Inc's total equity = The Harrington Inc's total asset - The Harrington Inc's total debt = $250,000 - $112,500 = $137,500;

- Using the Dupont equation, calculate the ROE as followed:

(NI/Sales)* (Sales/ Total assets) * (Total assets/ Total common equity) = (19,000/325,000) * ( 325,000/ 250,000) * (250,000/137,500) = 13.818%.

- Thus, the ROE = 13.818%.

5 0
3 years ago
According to ______________, stock prices react instantaneously, completely and accurately to all publicly available information
Lelu [443]

Answer:

Theory of Efficient markets

Explanation:

According to this theory stock prices react instantaneously to new information

4 0
3 years ago
Suppose that an American-made pair of blue jeans has a price of $80. If the exchange rate is $0.095 = 1 peso, then a Mexican con
Natasha2012 [34]

Answer:

The correct answer is 842.1 Pesos and 941.18 Pesos.

Explanation:

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

Price of Jeans = $80

So, if exchange rate is $0.095 = 1 pesos

Then pesos required to buy that jeans can be calculated as follows:

Pesos required = $80 ÷ $0.095

= 842.1 Pesos

And if 1 Pesos = $0.085, then

Pesos required = $80 ÷ $0.085

= 941.18 Pesos

8 0
3 years ago
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