Reference no: EM133035624

Questions -

Q1. Jane James owns an appliance store. She on average receives $88,000 worth of appliances per month. She does not like to owe people money and always pays her bills on the day she receives the invoice. Someone told her that if she delayed payment, she could actually increase her profit because the money would be earning interest in her account. She went through her bills and found that she actually had an additional ten days, on average to pay her invoices. She also found that she was earning 2 percent interest on the money she had in her money market savings account. If she delayed payment by the ten days, how much additional interest would she earn for the year?

Q2. A firm has $390,000 in credit sales and $128,000 in accounts receivable. Compute the average number of collection days.

Q3. Using the abswer to the prvious question, how does the numbers relate to the terms of 2/10 net/30?

Q4. You are managing a company that stocks and distributes hardware. The company employs two purchasing agents who receive combined salaries of $92,000. They process six thousand purchase requests per year. Average inventory in storage is $579,000, and the total cost of running the warehouse is $224,000. You are told that the company purchases five thousand hammers per year at a cost of $4.8 per hammer. Using the EOQ formula, how many hammers should be ordered at one time?