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Question;75. Forest Gardens, Inc., has a beginning receivables;balance on February 1 of $730. Sales for February through May are $720, $760;$820, and $850, respectively. The accounts receivable period is 30 days. What;is the amount of the April collections? Assume a year has 360 days.;A. $720;B. $760;C. $790;D. $820;E. $850;76. Davis and Davis have expected sales of $490, $465;$450, and $570 for the months of January through April, respectively. The;accounts receivable period is 28 days. What is the accounts receivable balance;at the end of March? Assume a year has 360 days.;A. $420;B. $426;C. $440;D. $450;E. $482;77. The Athletic Sports Store has a beginning;receivables balance on January 1 of $410. Sales for January through April are;$440, $460, $690, and $720, respectively. The accounts receivable period is 60;days. How much did the firm collect in the month of April? Assume a year has;360 days.;A. $410;B. $440;C. $460;D. $690;E. $720;78. Breakwater Aquatics has a 45 day accounts;receivable period. The estimated quarterly sales for this year, starting with;the first quarter, are $6,800, $7,100, $8,200, and $6,400, respectively. What;is the accounts receivable balance at the beginning of the third quarter?;Assume a year has 360 days.;A. $3,400;B. $3,550;C. $6,950;D. $7,100;E. $7,650;79. The Dog House expects sales of $560, $650, $670;and $610 for the months of May through August, respectively. The firm collects;20 percent of sales in the month of sale, 70 percent in the month following the;month of sale, and 8 percent in the second month following the month of sale.;The remaining 2 percent of sales is never collected. How much money does the;firm expect to collect in the month of August?;A. $621;B. $628;C. $633;D. $639;E. $643;80. The Wire House purchases its inventory one quarter;prior to the quarter of sale. The purchase price is 55 percent of the sales;price. The accounts payable period is 45 days. The accounts payable balance at;the beginning of quarter one is $62,000. What is the amount of the expected;disbursements for quarter two given the following expected quarterly sales?;A. $20,500;B. $21,725;C. $24,250;D. $26,000;E. $26,675;81. Nadine's Boutique has a 30 day accounts payable;period. The firm has expected quarterly sales of $1,100, $1,400, $1,700, and;$2,100, respectively, for next year. The quarterly cost of goods sold is equal;to 68 percent of the next quarter's sales. The firm has a beginning accounts;payable balance of $550 as of Quarter 1. What is the amount of the projected;cash disbursements for accounts payable for Quarter 3 of the next year? Assume;a year has 360 days.;A. $1,195;B. $1,208;C. $1,247;D. $1,337;E. $1,380;82. Kid's Delight expects to sell $8,200 worth of toys;in December, $3,700 worth in January, $4,400 in February, and $6,100 in March.;The wholesale cost is 72 percent of the retail price. The firm has a;receivables period of 30 days, a payables period of 60 days, and buys inventory;one month prior to selling it. Which one of the following statements is;correct?;A. The February payments to suppliers are $2,992.;B. The March collections are $3,700.;C. The accounts receivable balance at the end of March is $4,400.;D. The purchases for February are $3,168.;E. The accounts payable balance at the end of January is $5,832.;83. As of the beginning of the quarter, Swenson's;Inc. had a cash balance of $460. During the quarter, the company collected $520;from customers and paid suppliers $360. The company also paid an interest;payment of $20 and a tax payment of $110. In addition, the company repaid $140;on its long-term debt. What is Callahan's cash balance at the end of the;quarter?;A. -$110;B. $320;C. $350;D. $430;E. $490;84. On May 1, your firm had a beginning cash balance;of $175. Your sales for April were $430 and your May sales were $480. During;May, you had cash expenses of $110 and payments on your accounts payable of;$290. Your accounts receivable period is 30 days. What is your firm's beginning;cash balance on June 1?;A. $145;B. $155;C. $205;D. $215;E. $265;85. The Mish Mash Store has a beginning cash balance;of $440 on March 1. The firm has projected sales of $610 in February, $680 in;March, and $740 in April. The cost of goods sold is equal to 70 percent of;sales. Goods are purchased one month prior to the month of sale. The accounts;payable period is 30 days and the accounts receivable period is 10 days. The;firm has monthly cash expenses of $160. What is the projected ending cash;balance at the end of March? Assume every month has 30 days.;A. $258;B. $461;C. $507;D. $567;E. $621;86. Fancy Footwear has a line of credit with a local;bank in the amount of $80,000. The loan agreement calls for interest of 7;percent with a compensating balance of 5 percent, which is based on the total;amount borrowed. The compensating balance will be deposited into an;interest-free account. What is the effective interest rate on the loan if the;firm needs to borrow $75,000 for one year to cover operating expenses?;A. 7.37 percent;B. 7.43 percent;C. 7.56 percent;D. 8.17 percent;E. 8.33 percent;87. Juno Industrial Supply has a $150,000 line of;credit with a 6.5 percent interest rate. The loan agreement requires a 2;percent compensating balance, which is based on the total amount borrowed, and;which will be held in an interest-free account. What is the effective interest;rate if the firm borrows $90,000 on the line of credit for one year?;A. 6.42 percent;B. 6.47 percent;C. 6.50 percent;D. 6.58 percent;E. 6.63 percent;Amount borrowed = $90,000/(1 - 0.02) = $91,836.73;Annual interest = $91,836.73? 0.065 = $5,969.39;Effective interest rate = $5,969.39/$90,000 = 6.63 percent;88. Rachel's has a $50,000 line of credit with Uptown;Bank. The line of credit calls for an interest rate of 8 percent and a;compensating balance of 4 percent. The compensating balance is based on the;total amount borrowed and will be held in an interest-free account. What is the;effective annual interest rate if the firm borrows $35,000 for one year?;A. 7.76 percent;B. 8.00 percent;C. 8.17 percent;D. 8.33 percent;E. 8.42 percent;89. The collection period is 34 days. Assume that all;accounts are collected in full. What is the effective annual interest rate on;this arrangement?;A. 17.61 percent;B. 18.20 percent;C. 18.36 percent;D. 18.78 percent;E. 19.04 percent;90. New York Bank provides Food Canning, Inc. a;$250,000 line of credit with an interest rate of 1.75 percent per quarter. The;credit line also requires that 1 percent of the unused portion of the credit;line Delta Fish Hatchery factors its accounts receivables immediately at a 1.5;percent discount. The average be deposited in a non-interest bearing account as;a compensating balance. Food Canning, Inc.'s short-term investments are paying;1.2 percent per quarter. What is the effective annual interest rate on this;arrangement if the line of credit goes unused all year? Assume any funds;borrowed or invested use compound interest.;A. 4.76 percent;B. 4.80 percent;C. 4.89 percent;D. 7.00 percent;E. 7.27 percent;91. The Sports Store has a $100,000 line of credit;with City Bank. The loan agreement requires that 2 percent of the unused;portion of the credit line be deposited in a non-interest bearing account as a;compensating balance. The interest rate on the borrowed funds is 1.4 percent;per quarter. The Sport Store's short-term investments are paying 1.5 percent;per quarter. What is the effective annual interest rate on the line of credit;if The Sports Store borrows the entire $100,000 for one year? Assume any funds;borrowed or invested use compound interest.;A. 5.72 percent;B. 5.76 percent;C. 6.00 percent;D. 6.08 percent;E. 6.14 percent;92. Your bank offers you a $40,000 line of credit with;an interest rate of 1.75 percent per quarter. The loan agreement also requires;that 2 percent of the unused portion of the credit line be deposited in a;non-interest bearing account as a compensating balance. Your short-term;investments are paying 0.20 percent per month. What is your effective annual;interest rate on this arrangement if you do not borrow any money on this credit;line during the year? Assume any funds borrowed or invested use compound;interest.;A. 2.00 percent;B. 2.43 percent;C. 3.18 percent;D. 7.00 percent;E. 7.19 percent;93. New Town Bank offers you a $40,000 line of credit;with an interest rate of 1.85 percent per quarter. The loan agreement also;requires that 3 percent of the unused portion of the credit line be deposited;in a non-interest bearing account as a compensating balance. Short-term;investments are currently paying 1.1 percent per quarter. What is the effective;annual interest rate on the line of credit if you borrow the entire $40,000 for;one year? Assume any funds borrowed or invested use compound interest.;A. 4.47 percent;B. 4.58 percent;C. 7.61 percent;D. 7.78 percent;E. 12.33 percent;94. Josie's Craft Shack has a beginning cash balance;for the quarter of $1,126. The store has a policy of maintaining a minimum cash;balance of $1,000 and is willing to borrow funds as needed to maintain that;balance. Currently, the firm has a loan balance of $480. How much will the store;borrow or repay if the net cash flow for the quarter is -$280?;A. $0;B. $28;C. $126;D. $154;E. $280;95. The Cement Works has a beginning cash balance for;the quarter of $784. Susie, the firm's president, requires that a minimum cash;balance of $800 be maintained and requires that borrowing be used to maintain;that balance. If funds have been borrowed, then she requires that those loans;be repaid as soon as excess funds are available. Currently, the firm has a loan;outstanding of $1,260. How much will the firm borrow or repay this quarter if;the quarterly receipts are $3,918 and the quarterly disbursements are;$3,774?;A. borrow $16;B. borrow $128;C. borrow $144;D. repay $128;E. repay $144.;96. At the beginning of the year, you have an outstanding;short-term loan of $274 which was used to cover your cash needs for the;previous year. The interest expense for the year is $19. The projected net cash;flow for this year is $123, prior to any payment of principal or interest on;this loan. What is your anticipated loan balance at year end?;A. $151;B. $170;C. $176;D. $189;E. $193

 

Paper#51109 | Written in 18-Jul-2015

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