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1) Assume Green Leaf Nursery anticipated sales of \$500 in this quarter. Accounts receivable at the beginning of the quarter was \$300. Assuming a collection period of 30 days, which is the approximate cash collections amount for the quarter?;a) \$550;b) \$630;c) \$250;d) \$170;e) None of the above;2) Which of the following does not reduce collection float?;a) deposit collections at least daily.;b) make sure all checks it receives are properly dated and signed.;c) utilize the benefits of the Check Clearing Act for the 21st Century.;d) consolidate all lockboxes into one lockbox located near the home office.;3) You place an order for 100 units of inventory Part A at a unit price of \$522. The supplier offers terms of 1/25, net 40. How much should you remit if you take the discount?;a) \$52,200;b) \$39,150;c) \$51,678;d) None of the above;4) Auto Parts sells 1,600 electric parts per month and then reorders another 1,600 parts. If the relevant carrying cost per electric part is \$4 and the fixed order cost is \$650, what is the total carrying cost and the restocking cost, respectively?;a) \$6,400 and \$33,800;b) \$3,200 and \$33,800;c) \$6,400 and \$7,800;d) \$3,200 and \$7,800;e) None of the above;5) Company ABC has expected sales of 12,000 units this year, an ordering cost of \$6 per order and carrying costs of \$1.60 per unit. What is the EOQ?;a) 310 units;b) 300 units;c) 150 units;d) 155 units;e) None of the above;6) The operating cycle begins when _____ and ends when_____.;a) inventory is purchased, inventory is sold;b) inventory is purchased, payment is received for the sale of that inventory;c) inventory is purchased, the supplier of the inventory is paid;d) the sale of inventory occurs, payment is received for the sale of that inventory;e) the sale of inventory occurs, the supplier of the inventory is paid;TRUE OR FALSE;1) The optimal credit policy minimizes the total cost of granting credit.;2) Firms should avoid offering credit at all cost.;3) An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount.;4) The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit.;5) Capacity refers to the ability of a firm to meet its credit obligations out its operating cash flows.;6) The optimal credit policy is the policy that produces the largest amount of sales for a firm.;SHORT ANSWER;1) List three examples of short-term borrowing.

Paper#20086 | Written in 18-Jul-2015

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