a. Effective Annual rate | b. Average collection period | c. One-time client (Assumuing settlement in 30 days) | |||||
Notional purchase(assumed) | 100 | Gross revenue | 20 | 20 | Repair cost | 6000 | |
Discount % | 1% | Avg. receivables before new policy | 20/365*30= | 1.64384 | Default probability | 15% | |
Days difference | 30-5=25 | % paying early | 25% | 25% | NPV of client (-6000+(6000*(1-15%)/1.000219^30))+(6000*20%/1.000219^30) | 258.75 | |
Avg. receivables after new policy | (20*(1-25%))/365*30= | 1.23288 | Break-even probability =-6000+(p*5100)+(6000*20%)=0, solving for p, | ||||
Discount ($) | 1 | Change in receivables | 0.41096 | Extend credit if prob. Of getting paid is higher than, (p > )-- to break-even. | 0.94 | ||
Rate(%) | 1/99= | 1.01% | Cost of capital | 8% p.a./ 365= 0.0219% | 8% | 94% | |
Days difference in 1 year | 365-(5*12)= | 305 | PV of Projected savings in capital costs | (1.64384-1.23287))/0.0219%= | 1876.58 | ||
minus: PV of discounts | (20*25%*1%)/0.0219%= | -228.31 | |||||
EAR= | (1+1.01%)^(365/25)-1= | 15.80% | Projected savings net of discounts | 1648.26 | |||
Gross margin | 20*40%= | 8 | |||||
Gross revenues must rise by: | |||||||
$ | discount=(20*25%*1%) | 0.05 | |||||
% | (20*25%*1%)/20= | 0.25% |
Sales Cost of goods sold Gross margin Sales, general admin Interestepense Taxable income Jan 123 78...
Please post all Excel formulas. Prob. 1 Prob. 2 Mar. Mar. 1019 Income Statement (in MS) Jan. Feb. Sales Cost of goods sold Gross margin Sales, general & admin. Interest expense Taxable income Taxes Net income 1919 Balance Sheet (in MS) Jan. Feb. Cash Receivables Inventory Curr. Assets PP&E Total Assets Key Ratios Jan. Feb. Mar. Payables Notes Payable Accruals LTD Curr. Liabilities LTD Equity Total L&E Days Receivable Days Inventory Operating Cycle Days Payable Cash Cycle Mar 1. Apache's...
YOUR COMPANY Income Statement For the year ended January 31, 2019 Sales revenue (net) 55,432 Cost of goods sold -9,778 Gross profit 45,704 Operating expenses: Selling expenses 2,598 General & administrative expenses 25,869 Depreciation expense 8,548 Total operating expenses 38,015 Operating Income 9,089 Other items: Interest expense -3,253 Loss on sale of equipment 625 3,878 Net Income 4,811 YOUR COMPANY Statement of Cash Flows For the year ended January 31st, 2019 Cash Flows from Operating Activities Net Income Adjustments for...