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balu736 [363]
2 years ago
8

Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that throu

gh the establishment of local collection centers around the country, she can speed up the collection of payments by two days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Florida.
a. If Neon Light Company has $2.55 million per day in collections and $1.11 million per day in disbursements, how many dollars will the cash management system free up? (Enter your answer in dollars not in millions (e.g., $1,234,567).)
b. If Neon Light Company can earn 7 percent per annum on freed-up funds, how much will the income be? (Enter your answer in dollars not in millions (e.g., $1,234,567).)
c. If the total cost of the new system is $430,000, should it be implemented?
Yes
No
Business
1 answer:
Airida [17]2 years ago
4 0

Answer:

a. Cash freed up by cash management:

= Amount received * speed increased by + Amount disbursed by speed reduced by

= 2,550,000 * 2 days + 1,110,000 * 1/2 days

= 5,100,000 + 555,000

= $‭5,655,000‬

b. Interest on freed up cash:

= ‭5,655,000‬ * 7%

= $‭395,850‬

c.<u> No.</u> It is less than the income earned from interest from freed up cash so it should not be implemented as it brings no additional benefit.

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NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.5
konstantin123 [22]

Answer:

The current stock price is $13.60

Explanation:

D1 = $0.53

D2 = $0.58

D3 = $0.73

D4 = $1.03

Growth rate, g = 3.60%

Required return, r = 10.00%

D5 = D4 * (1 + g)

D5 = $1.03 * 1.036

D5 = $1.06708

P4 = D5 / (r - g)

P4 = $1.06708 / (0.10 - 0.036)

P4 = $16.673125

P0 = $0.53/1.10 + $0.58/1.10^2 + $0.73/1.10^3 + $1.03/1.10^4 + $16.673125/1.10^4

P0 = $13.60

So, current stock price is $13.60

7 0
3 years ago
If a company spends $14.4 million to install refurbished footwear-making equipment with capacity to produce 1 million pairs of a
Margaret [11]

The annual depreciation costs at that facility will rise by 10% or $1,440,000.

<h3>Annual depreciation costs</h3>

Life of the equipment = 10 Years

Salvage value = 0

Annual Depreciation= (Cost of equipment - Estimated salvage value) / Estimated useful life

Annual Depreciation= ($14.4 million- 0) / 10

Annual Depreciation= $1,440,000

or

Annual Depreciation= $1,440,000/$14,400,000 ×100

Annual Depreciation= 10%

Inconclusion the annual depreciation costs at that facility will rise by 10% or $1,440,000.

Learn more about annual depreciation cost here:brainly.com/question/15872169

4 0
2 years ago
Computing cash flows from financing LO P3 Additional short-term borrowings $ 20,000 Purchase of short-term investments 5,000 Cas
White raven [17]

Answer:

Cash flows from Financing Activities $4,000

Explanation:

Computation of cash flows from financing activities

Additional short-term borrowings $20,000

Less Cash dividend paid ($16,000)

Cash flows from Financing Activities $4,000

Therefore the Cash flows from Financing Activities will be $4,000.

6 0
3 years ago
As a result of a thorough physical inventory, Horace Company determined that it had inventory worth $320,000 at December 31, 201
Alex_Xolod [135]

Answer:

Option (b) is correct.

Explanation:

Correct amount of inventory to be reported:

Amount of inventory as per physical verification = $320,000

Cost of goods under consignment to Herschel Corporation = $47,000

Value of inventory to be reported:

= Amount of inventory as per physical verification + Cost of goods under consignment to Herschel Corporation

= $320,000 + $47,000

= $367,000

3 0
3 years ago
Swansea Finishing produces and sells a decorative pillow for $100.00 per unit. In the first month of operation, 2,000 units were
Cloud [144]

Answer:

$41,400

Explanation:

Swansea Finishing

Variable cost of goods sold = Variable manufacturing costs × Units Sold

Variable manufacturing costs $23.00

Units sold $1,800

Hence:

$23.00 × 1,800 units

= $41,400

Therefore the cost of goods sold using variable costing is $41,400

6 0
3 years ago
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