Problem 16.07 – Factoring Receivables
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Given the collection period and discount percent… find the EAR.
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Given the collection period and discount percent… find the EAR.
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What are the payments to suppliers for each quarter assuming orders equal to a certain percent of projected sales for the next quarter, a 90-day payables period, and a 60-day payables period? Calculate the payments made to suppliers.
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Given the information on what management expects… determine the expected return on equity under a restricted policy, moderate policy, and relaxed policy – then determine if the assumptions are valid.
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Fill out a grid with the payment of accounts, wages, taxes, and other expenses. Long-term financing expenses (interest and dividends).
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Given the information on the company after the market area grew… determine the amount of free cash that they would make from the lockbox system, the annual worth of the lockbox system, and the monthly charge they should pay for the lockbox system.
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Given the information (sales forecast, estimated costs, etc.)… prepare a monthly cash budget using a very large grid.
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Given the credit sales, accounts receivable balance, and the monthly sales budget… find the sales, and the cash collections from sales.
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Given the important figures from the second quarter, uncollected credit sales, percent collected in the month of sale and the following month, and the previous month’s credit… complete the cash budget.
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