1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ganezh [65]
2 years ago
12

Garcia Industries has sales of $176,500 and accounts receivable of $18,500. Assume all sales to be on credit. The industry avera

ge DSO is 27 days, based on a 365-day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 3.0% on any cash freed-up by this change, assuming other things are held constant, by how much would the net income be affected?
Business
1 answer:
zloy xaker [14]2 years ago
8 0

Answer:

$163.32

Explanation:

Days Sales Outstanding = 365 * Accounts receivable / Sales

If the Days Sales Outstanding falls to the industry average:

27 = 365 * Accounts receivable / $176,500

27 * $176,500 = 365 * Accounts receivable

Accounts receivable = 27 * $176,500 / 365

Accounts receivable = $13,056.16

Increase in net income = Decrease in accounts receivable * 3%

Increase in net income = ($18,500 - $13,056.16) * 3%

Increase in net income = $5,443.84 * 3%

Increase in net income = $163.3152

Increase in net income = $163.32

You might be interested in
Which of the following would you list as an "Essential (Fixed)" expense?
11Alexandr11 [23.1K]

Out of the above choices I would Asnwer. D Rent. Rent is an Essential (fixed) expense. The other expenses electricty, telephone and car repair are all variable expenses because they normally are net set rates every month. Due to the changng of amounts these expenses fluxtuate not allowing thme to be a fixed expense like rent is.

4 0
2 years ago
Read 2 more answers
Assume that investors can borrow and lend at risk-free rate of 5%. The optimal tangent portfolio on the efficient frontier has a
gizmo_the_mogwai [7]

Answer:

B. Portfolio B with E(R)=13% and STD=18%

Explanation:

The computation is shown below;

Reward to risk ratio = (15% - 5%) ÷ 20% = 0.5

The porfolio should be in line i.e.

= 0.05 + 0.5 × standard deviation

For portfolio A

= 0.05 + 0.5 × 25

= 17.5%

For portfolio C

= 0.05 + 0.5 × 1

= 5.5%

Portfolio B, the std is 18%

So,

= 0.05 + 0.5 × 18%

= 14%

5 0
2 years ago
To accurately compare the rate of return on one investment with another, they should be:
NISA [10]

Answer:

Measured over equal time periods.

Explanation:

To get an understanding of the <u>rate</u> of return you first need to lay down a period of time that you can use as a baseline when comparing the return of each investment.

7 0
3 years ago
A. Define supply as an economist would. B. List and explain three (3) non-price factors that will shift the supply curve. C. If
Paladinen [302]

Answer:

A: Refer the detail below

B: Refer the detail below

C: Refer the detail below

Explanation:

A. Definition of Supply

Supply is an economic term that refers to the quantity of a given product or service that suppliers are willing to offer to consumers at a given price level at a given period. Supply is positively related to price given that at higher prices there is an incentive to supply more as higher prices may generate increased revenue and profits

B. Non-price factors that will shift the supply curve

1. Producer input costs

2. producer expectation

3. The number of sellers.

C. Impact of Fountain Pens market

If the cost of production of fountain pens falls, producers can produce more goods by using the same amount of money. Therefore, the supply will increase and the supply curve will shift to the right.

5 0
3 years ago
Oriole Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory o
Vladimir79 [104]

Answer:

$440,140

Explanation:

According to the accounting principle, the inventory should be valued at lower of cost or market value. The calculation is shown below:

                      Cost                   Market             Lower value

Small             $68,650           $56,490              $56,490

Medium        $283,710          $237,140              $237,140

Large            $146,510          $177,300               $146,510

Total                                                                    $440,140

Hence, the ending inventory would be valued at $440,140

5 0
2 years ago
Other questions:
  • On april 12, hong company agrees to accept a 60-day, 10%, $4,500 note from indigo company to extend the due date on an overdue a
    11·1 answer
  • The knowledge and skills acquired by a worker through education and experience is a description of which factor of production? p
    8·1 answer
  • Stephen is preparing his pitch for a bank representative that will be considering him for a business loan. He lists the resumes
    7·1 answer
  • Assume that John and Tina show up to a publicly funded office occupied by the incumbent that they are trying to unseat. They dec
    8·1 answer
  • It is possible that a(n) ________ vertical marketing system can be more formally structured through strategic alliances and part
    11·1 answer
  • ________ refers to how quickly information is reflected in the available prices for trading. Market efficiency Mechanical effici
    13·1 answer
  • Using examples discuss the skills required for entrepreneurship​
    15·1 answer
  • Illustrate how a liberalized global economy can influence upon natural resources concerning the granting of logging franchise ri
    9·1 answer
  • On January 1, Year 2, Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowanc
    5·1 answer
  • what happens when the price of a good increases holding everything else constant? producer surplus decreases consumer surplus de
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!