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ABC Company writes 330 checks a day for an average amount of $489 each. These checks generally clear the bank in 2 days. In addition, the firm generally receives an average of $176,042 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm's net float?
Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
Net Float = Disbursement Float + Collection Float
Disbursement Float = number of checks written * $check amount * number of days to clear the checks
Collection Flat = $checks collected * number of days to clear the checks
ABC Company has a cash cycle of 12.62 days, an operating cycle of 19.02 days, and an average collection period of 4 days. The company reported cost of goods sold of $266,677. What is the company's average balance in Accounts Payable?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box
Cash Cycle = Operating Cycle - Accounts Payable PeriodCash Cycle = Operating Cycle - 365(1/AP Turnover)(OC-CC)=365(AP/COGS)
Compute the Accounts Payable (A/P) period based on the following information:
Average A/P balance = $50,659Annual Cost of Goods Sold = $455,648Assume 365 days
Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
A/P period = 365/(COGS/Accounts Payable)
ABC Company sells 3,845 chairs a year at an average price per chair of $167. The carrying cost per unit is $37.98. The company orders 500 chairs at a time and has a fixed order cost of $64 per order. The chairs are sold out before they are restocked. What is the economic order quantity?
Enter your answer rounded off to two decimal points. Do not enter comma in the answer box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
EOQ=(2*T*F/C)0.5
Sales are collected as follows:
In the month of Sales: 34%In the next month: 22%After 2 months: 13%After 3 months: remainder is collected
Calculate the cash collection for November.
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
As of this morning, your firm had a ledger balance of $4,699 with no outstanding deposits or checks. Today, your firm deposited 9 checks in the amount of $483 each and wrote a check in the amount of $796. What is the amount of the collection float as of the end of the day?
Collection Float =total $ amount of checks deposited
As of this morning, your firm had a ledger balance of $3,074 with no outstanding deposits or checks. Today, your firm deposited 7 checks in the amount of $442 each and wrote 4 checks in the amount of $981. What is the amount of the disbursement float as of the end of the day?
Disbursement Float =total $ amount of checks witten
On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/6, net 38. What is the effective annual rate of interest for the credit period for this sale?
Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
Solve for effective rate
In the month of Sales: 40%In the next month: 33%After 2 months: 9%After 3 months: remainder is collected
Calculate the cash collection for December.
ABC Company sells 4,217 chairs a year at an average price per chair of $167. The carrying cost per unit is $55.48. The company orders 348 chairs at a time and has a fixed order cost of $161 per order. The chairs are sold out before they are restocked. How many orders will company place if it follows the economic order quantity model?
Optimal number of orders = T/EOQ
The terms of the sale were 3/8, net 43. What is the effective annual rate of interest?
In the month of Sales: 32%In the next month: 27%After 2 months: 5%Remainder is considered as bad debt and is not collected.
Calculate the cash collection for June.
ABC Corporation currently has an inventory turnover of 27.38, a payables turnover of 13.4, and a receivables turnover of 13.94. How many days are in the operating cycle?
Operating cycle = Inventory period + A/R Period = 365/ITR + 365/ART
ABC Company has an average collection period of 29 days and factors all of its receivables immediately at a 1.5 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?
ABC Company sells 2,014 chairs a year at an average price per chair of $126. The carrying cost per unit is $39.72. The company orders 365 chairs at a time and has a fixed order cost of $82.8 per order. The chairs are sold out before they are restocked. What are the total shortage costs?
Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.
Total Shortage Costs = Fixed Costs * T/Q
Compute the cash cycle based on the following information:
Average Collection Period = 51Accounts Payable Period = 46Average Age of Inventory = 41
Cash Cycle = Inventory Period + A/R Period - A/P Period
ABC Company has annual sales of $413,375 and cost of goods sold of $198,600. The average accounts receivable balance is $52,359. How many days on average does it take the firm to collect its accounts receivable? Assume 365 days.
Average Collection Period (ACP) = 365/(Sales/Accounts Receivable)
The company has estimated expenses as follows: General and administrative expenses: $9,293Material purchases are 74 percent of sales. Material purchases are paid in the month following the purchase.Interest payment per month: $3,596Rent expenses per quarter starting March: $6,525
Calculate the cash outflows for June.
Suppose that material purchases are x% of sales.Purchases are paid in the month following the purchases.
Therefore, purchases in May = x% of Sales of May This amount will be paid after one month in June.
Therefore, cash outflows in June = x% of Sales of May + Gen & Admin Exp + Interest Expense + Rent Expense
ABC Company has annual sales of $400,000 and cost of goods sold of $335,709. The accounts payable period is 50.78 days. What is the average accounts payable balance?
Accounts Payable Period = 365/(COGS/Accounts Payable)
Re-arranging, we get, Accounts Payable = Accounts Payable Period*COGS/365
ABC Company sells 2,587 chairs a year at an average price per chair of $153. The carrying cost per unit is $18.42. The company orders 380 chairs at a time and has a fixed order cost of $109.7 per order. The chairs are sold out before they are restocked. What are the total carrying costs?
Total Carrying Costs = Q/2*carrying cost per unit
ABC Corporation currently has an inventory turnover of 9.54, a payables turnover of 10.26, and a receivables turnover of 12.65. How many days are in the cash cycle?
Cash cycle = Inventory period + A/R Period - A/P Period = 365/ITR + 365/ART - 365/APT
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