Details of this Paper

FIN 540 week 7

Description

solution


Question

Question;FIN 540 ? Homework Chapter 27;? 2013 Strayer University. All Rights;Reserved. This document contains Strayer University Confidential and;Proprietary information;and may not be copied, further distributed;or otherwise disclosed in whole or in part, without the expressed written;permission of;Strayer University.;FIN 540 Homework Chapter 27! Page 1 of 2!;Directions: Answer the following five;questions on a separate document. Explain how you reached the;answer or show your work if a mathematical;calculation is needed, or both. Submit your assignment using;the assignment link in the course shell.;Each question is worth five points apiece for a total of 25 points;for this homework assignment.;1. A firm's credit policy consists of which;of the following items?;a. Credit period, cash discounts, credit;standards, collection policy.;b. Credit period, cash discounts;receivables monitoring, collection policy.;c. Cash discounts, credit standards;receivables monitoring, collection policy.;d. Credit period, receivables monitoring;credit standards, collection policy.;e. Credit period, cash discounts, credit;standards, receivables monitoring.;2. Which of the following is not correct?;a. A more aggressive collection policy will;reduce bad debt expenses, but may also;decrease sales.;b. Collection policy usually has little;impact on sales since collecting past-due accounts;occurs only after the customer has already;purchased.;c. Typically a firm will turn over an;account to a collection agency only after it has tried;several times on its own to collect the;account.;d. A lax collection policy will frequently;lead to an increase in accounts receivable.;e. Collection policy is how a firm goes;about collecting past-due accounts.;3. Which of the following is not correct;for a firm with seasonal sales and customers who all pay;promptly at the end of 30 days?;a. The quarterly uncollected balances;schedule will be the same in each quarter.;b. The level of accounts receivable will be;constant from month to month.;c. The ratio of accounts receivable to;sales will vary from month to month.;d. The level of accounts receivable at the;end of each quarter will be the same.;e. DSO will vary from month to month.;4. Which of the following statements is;most correct?;a. It is possible for a firm to overstate;profits by offering very lenient credit terms which;encourage additional sales to financially;weak" firms. A major disadvantage of such a;policy is that it is likely to increase;uncollectible accounts.;b. A firm with excess production capacity;and relatively low variable costs would not be;inclined to extend more liberal credit;terms to its customers than a firm with similar costs;that is operating close to capacity.;c. Firms use seasonal dating primarily to;decrease their DSO.;d. Seasonal dating with terms 2/15, net 30;days, with April 1 dating, means that if the;original sale took place on February 1st;the customer can take the discount up until;March 15th, but must pay the net invoice;amount by April 1st.;e. If credit sales as a percentage of a;firm's total sales increases, and the volume of credit;sales also increases, then the firm's;accounts receivable will automatically increase.;FIN;540 ? Homework Chapter 27;? 2013 Strayer University. All Rights;Reserved. This document contains Strayer University Confidential and;Proprietary information;and may not be copied, further distributed;or otherwise disclosed in whole or in part, without the expressed written;permission of;Strayer University.;FIN 540 Homework Chapter 27! Page 2 of 2!;5. Which one of the following aspects of;banks is considered most relevant to businesses when;choosing a bank?;a. Competitive cost of services provided.;b. Size of the bank's deposits.;c. Experience of personnel.;d. Loyalty and willingness to assume;lending risks.;e. Convenience of location.

 

Paper#49562 | Written in 18-Jul-2015

Price : $22
SiteLock