24. Assume a firm has a cash cycle of 40 days and an operating
cycle of 67 days.
What is its average payment period?
25. Assume a firm has a cash cycle of 77 days and an operating
cycle of 135 days.
What is its payables turnover? (Use 365 days a year. Round your
answer to 2 decimal places.)
Payable's turnover will be 365 days/58 days = 6.29 times
28. Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $1,300,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = $1,300,000, term = 1 year, up-front fee = 15 basis points, back-end fee = 30 basis points. If you take down 90 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.
24)
Average payment period:
= Operating cycle – Cash cycle
= 67 days – 40 days
= 27 days
Hence, Average payment period is 27 days
24. Assume a firm has a cash cycle of 40 days and an operating cycle of...
19) Suppose a firm pays total dividends of $320,000 out of net income of $2.7 million. What would the firm's payout ratio be? A) .32 B) 1.19 C) .119 D) 8.438 20) Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $1,500,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan...
Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $2,900,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = $2,900,000, term = 1 year, up-front fee = 15 basis points, back-end fee = 30 basis points. If you take down 90 percent of the total loan commitment, calculate the...
Help Save &E Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund inventory purchases for your small business. The total loan avalable was $1.080.00. of which you took down $830,000. It is now the end of the loan commitment period and your bank is acking you to pay the backend fees. You have misplaced the paperwork that isted the terms of the commitment, but you know you paid...
Help Save &Et Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund inventory purchases for your smal business. The total loan avalable was St060000 of which you took down $830.000. it is now the end of the loan commtment period and your bankis aking you to pay the backend fees You have msplaced the paperwork that isted the terms of the commitment, but you know you paid total...
Your firm currently has an operating cycle of 64 days. You are analyzing some operational changes, which are expected to decrease the accounts receivable period by 3 days and decrease the inventory period by 2 days. The accounts payable turnover rate is expected to increase from 7 to 9 times per year. If these changes are adopted, what will your firm's new operating cycle be? Please show all work.
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,330,000 (all on credit), and its net profit margin was 4%. Its inventory turnover was 6.5 times during the year, and its DSO was 41 days. Its annual cost of goods sold was $1,300,000. The firm had fixed assets totaling $380,000. Strickler's payables deferral period is 45 days. Assume a 365-day year. Do not round intermediate calculations. A. Calculate...
please answer the following questins and show all work, thank you! A $300 million loan commitment has an up-front fee of 25 basis points and a back-end fee of 15 basis points on the unused portion. 1. The up-front fee is 2. If 50 % of the commitment is taken down, the back-end fee is 3. If 25 % of the commitment is taken down, the total fees are 4. If 75 % of the commitment is taken down, what...
CASH CONVERSION CYCLE Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $183,000; its cost of goods sold is 80% of sales, and it earned a net profit of 4%, or $7,320. It turned over its inventory 4 times during the year, and its DSO was 39 days. The firm had fixed assets totaling $34,000. Chastain's payables deferral period...
CASH CONVERSION CYCLE Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $183,000; its cost of goods sold is 80% of sales, and it earned a net profit of 4%, or $7,320. It turned over its inventory 4 times during the year, and its DSO was 39 days. The firm had fixed assets totaling $34,000. Chastain's payables deferral period...
CASH CONVERSION CYCLE Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $272,000; its cost of goods sold is 80% of sales; and it earned a net profit of 3%, or $8,160. It turned over its inventory 4 times during the year, and its DSO was 35 days. The firm had fixed assets totaling $32,000. Chastain's payables deferral period...