Nova Southeastren University Spring 2015 Finace Fin5080 Quiz 5 all correct answer 100 %

• Question 1

ABC Company sells 3,381 chairs a year at an average price per chair of $166. The carrying cost per unit is $31.67. The company orders 500 chairs at a time and has a fixed order cost of $119 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.

Selected Answer:

• Question 2

Which one of the following is most indicative of a flexible short-term financial policy?

Selected Answer:

• Question 3

Month Sales $ Month Sales $

Jan 20,912 July 48,141

Feb 31,433 Aug 22,614

Mar 22,614 Sep 20,912

Apr 48,141 Oct 22,614

May 20,912 Nov 31,433

June 31,433 Dec 48,141

• Question 4

ABC Company writes 252 checks a day for an average amount of $380 each. These checks generally clear the bank in 2 days. In addition, the firm generally receives an average of $146,088 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.

• Question 5

On July 15th, you purchased $10,000 worth of goods. The terms of the sale were 1/9, net 50. What is the effective annual rate of interest for thecreditperiod for this sale?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

• Question 6

ABC Company sells 4,676 chairs a year at an average price per chair of $136. The carrying cost per unit is $25.71. The company orders 461 chairs at a time and has a fixed order cost of $83.4 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.

• Question 7

Which of the following is a Source of Cash? Choose only one.

Selected Answer:

• Question 8

As of this morning, your firm had a ledger balance of $4,402 with no outstanding deposits or checks. Today, your firm deposited 4 checks in the amount of $161 each and wrote a check in the amount of $660. What is the amount of the collection float as of the end of the day?

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.

Selected Answer:

• Question 9

Compute the cash cycle based on the following information:

Average Collection Period = 55

Accounts Payable Period = 44

Average Age of Inventory = 49

Selected Answer:

• Question 10

Identify a source of cash from below. Choose only one.

Selected Answer:

• Question 11

The terms of the sale were 1/6, net 44. What is the effective annual rate of interest?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

Selected Answer:

• Question 12

Identify which of the following will increase the operating cycle. Choose only one.

Selected Answer:

• Question 13

ABC Company has annual sales of $400,000 and cost of goods sold of $153,807. The accounts payable period is 37.07 days. What is the average accounts payable balance?

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.

Selected Answer:

• Question 14

ABC Company has an average collection period of 37 days and factors all of its receivables immediately at a 2 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing?

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

Selected Answer:

• Question 15

ABC Company sells 2,600 chairs a year at an average price per chair of $169. The carrying cost per unit is $28.9. The company orders 347 chairs at a time and has a fixed order cost of $69.9 per order. The chairs are sold out before they are restocked. What are the total carrying 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.

Selected Answer:

• Question 16

Month Sales $ Month Sales $

Jan 21,547 July 23,343

Feb 38,922 Aug 43,327

Mar 43,327 Sep 21,547

Apr 23,343 Oct 43,327

May 21,547 Nov 38,922

June 38,922 Dec 23,343

• Question 17

ABC Corporation currently has an inventory turnover of 23.46, a payables turnover of 16.61, and a receivables turnover of 17.87. How many days are in the cash cycle?

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.

Selected Answer:

• Question 18

ABC Company has annual sales of $466,446 and cost of goods sold of $198,600. The average accounts receivable balance is $68,027. How many days on average does it take the firm to collect its accounts receivable? Assume 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.

Selected Answer:

)

• Question 19

ABC Company has a cash cycle of 13.55 days, an operating cycle of 22.98 days, and an average collection period of 4 days. The company reported cost of goods sold of $287,825. 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

Selected Answer:

• Question 20

ABC Corporation currently has an inventory turnover of 25.56, a payables turnover of 5.34, and a receivables turnover of 7.71. How many days are in the operating cycle?

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.

Selected Answer:

• Question 21

Compute the Accounts Payable (A/P) period based on the following information:

Average A/P balance = $36,501

Annual Cost of Goods Sold = $177,052

Assume 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.

Selected Answer:

• Question 22

Month Sales $ Month Sales $

Jan 42,044 July 43,112

Feb 44,224 Aug 23,256

Mar 23,256 Sep 42,044

Apr 43,112 Oct 23,256

May 42,044 Nov 44,224

June 44,224 Dec 43,112

• Question 23

As of this morning, your firm had a ledger balance of $3,301 with no outstanding deposits or checks. Today, your firm deposited 2 checks in the amount of $357 each and wrote 8 checks in the amount of $639. What is the amount of the disbursement float as of the end of the day?

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.

Selected Answer:

• Question 24

ABC Company sells 2,733 chairs a year at an average price per chair of $129. The carrying cost per unit is $33.54. The company orders 321 chairs at a time and has a fixed order cost of $71 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?

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.

Selected Answer:

• Question 25

Month Sales $ Month Sales $

Jan 39,325 July 21,408

Feb 15,199 Aug 44,977

Mar 44,977 Sep 39,325

Apr 21,408 Oct 44,977

May 39,325 Nov 15,199

June 15,199 Dec 21,408

Sales are collected as follows:

In the month of Sales: 30%

In the next month: 25%

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.

Selected Answer:

• Question 26

Indicate the effect of the following on the cash cycle: Accounts payable turnover goes up

Selected Answer:

.

• Question 27

Indicate the effect of the following on the operating cycle: Customers take longer to make the payment

Selected Answer:

.