Questions from Corporate Finance

Q: It takes Cookie Cutter Modular Homes, Inc., about six days

It takes Cookie Cutter Modular Homes, Inc., about six days to receive and deposit checks from customers. Cookie Cutter’s management is considering a lockbox system to reduce the firm’s collection time...

Q: No More Pencils, Inc., disburses checks every two weeks that

No More Pencils, Inc., disburses checks every two weeks that average $93,000 and take seven days to clear. How much interest can the company earn annually if it delays transfer of funds from an intere...

Q: You place an order for 400 units of inventory at

You place an order for 400 units of inventory at a unit price of $125. The supplier offers terms of 1/10, net 30.a. How long do you have to pay before the account is overdue? If you take the full peri...

Q: Devour, Inc., is considering a change in its cash only

Devour, Inc., is considering a change in its cash only sales policy. The new terms of sale would be net one month. Based on the following information, determine if Devour should proceed or not. Descri...

Q: Redan Manufacturing uses 2,500 switch assemblies per week and then

Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. If the relevant carrying cost per switch assembly is $9, and the fixed order cost is $1,700, is Redan’s inven...

Q: The Techtronic’s store begins each week with 300 phasers in

The Techtronic’s store begins each week with 300 phasers in stock. This stock is depleted each week and reordered. If the carrying cost per phaser is $41 per year and the fixed order cost is $95, what...

Q: The Sand Surfer Corporation has annual sales of $47 million.

The Sand Surfer Corporation has annual sales of $47 million. The average collection period is 36 days. What is the average investment in accounts receivable as shown on the balance sheet?

Q: Consider the following information:

Consider the following information:a. What is the expected return on an equally weighted portfolio of these three stocks?b. What is the variance of a portfolio invested 20 percent each in A and B and...

Q: Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its

Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 210, net 30. Based on experience, 65 percent of all customers will take the discount.a. What is the average coll...

Q: Skye Flyer, Inc., has weekly credit sales of $19,400, and

Skye Flyer, Inc., has weekly credit sales of $19,400, and the average collection period is 34 days. The cost of production is 75 percent of the selling price. What is the average accounts receivable f...