McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 70 days after their purchases. a. What is the days sales outstanding? b. What is the average amount of receivables? c. What is the percentage cost of trade credit to customers who take the discount? d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 70 days? e. What would happen to McEwan’s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?

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 $121,000; its cost of goods sold is 80% of sales; and it earned a net profit of 2%, or$2,420. It turned over its inventory 7 times during the year, and its DSO was 37 days. The firm had fixed assets totaling $42,000. Chastain’s payables deferral period is 35 days. a. Calculate Chastain’s cash conversion cycle. b. Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Chastain’s managers believe that the inventory turnover can be raised to 9.9 times. What would Chastain’s cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9.9 for 2016?

Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty percent of the customers pay on Day 10 and take discounts; the other 60 percent pay, on average, 40 days after their purchases.

What would happen to average receivables if Morrissey tightened its collection policy with the result that all current nondiscount customers paid on Day 30?

McDowell Industries sells on terms of $3 / 10$, net $30$ . Total sales for the year are $\$ 912,500 ; 40 \%$ of the customers pay on the $10^{\text {th }}$ day and take discounts, while the other $60 \%$ pay, on average, $40$ days after their purchases.

a. What is the days sales outstanding?

b. What is the average amount of receivables?

c. What is the percentage cost of trade credit to customers who take the discount?

d. What is the percentage cost of trade credit to customers who do not take the discount and pay in $40$ days?

e. What would happen to McDowell's accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the $30^{\text {th }}$ day?

Parramore Corp has $12 million of sales,$3 million of inventories, $3.25 million of receivables, and$1.25 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 8% rate. What is Parramore’s cash conversion cycle (CCC)? If Parramore could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits?

Rentz Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately $2 million as a result of an asset expansion presently being undertaken. Fixed assets total$1 million, and the firm plans to maintain a 60% debt-to-assets ratio. Rentz’s interest rate is currently 8% on both short- and long-term debt (which the firm uses in its permanent structure). Three alternatives regarding the projected current assets level are under consideration: (1) a restricted policy where current assets would be only 45% of projected sales, (2) a moderate policy where current assets would be 50% of sales, and (3) a relaxed policy where current assets would be 60% of sales. Earnings before interest and taxes should be 12% of total sales, and the federal-plus-state tax rate is 40%. a. What is the expected return on equity under each current assets level? b. In this problem, we assume that expected sales are independent of the current assets investment policy. Is this a valid assumption? Why or why not? c. How would the firm’s risk be affected by the different policies?

Answer the following.

McEwan Industries sells on terms of 3 / 10, net 30 . Total sales for the year are 1,921,000 dollars ; 40 percent of the customers pay on the 10th day and take discounts, while the other 60 percent pay, on average, 70 days after their purchases.

a. What is the days sales outstanding?

b. What is the average amount of receivables?

c. What is the percentage cost of trade credit to customers who take the discount?

d. What is the percentage cost of trade credit to customers who do not take the discount and pay in 70 days?

e. What would happen to McEwan's accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?

Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are$1.5 million. What is Leyton’s DSO, what would it be if all customers paid on time, and how much capital would be released if Leyton could take action that led to on-time payments?

The Neal Company wants to estimate next year’s return on equity (ROE) under different financial leverage ratios. Neal’s total capital is $14 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year’s EBIT for three possible states of the world:$4.2 million with a 0.2 probability, $2.8 million with a 0.5 probability, and$700,000 with a 0.3 probability. Calculate Neal’s expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios; then evaluate the results: $$ \begin{matrix} \text{Debt/Capital Ratio} & \text{Interest Rate}\\ \text{0\\%} & \text{--}\\ \text{10} & \text{9\\%}\\ \text{50} & \text{11}\\ \text{60} & \text{14}\\ \end{matrix} $$

When you cook and taste a soy burger. Write a paragraph to answer these questions: What does it taste like? What is its texture and color? How does it compare for nutrition and cost with a cooked beef patty of the same size? How might you use a soy burger in different types of recipes?

A company sells on credit terms of “2/10, n/30” and has days’ sales in account receivable of 30 days. Its days’ sales in receivables is a. too low. b. too high. c. about right. d. not able to be evaluated from the data given.

Use this diagram to answer the following 11 "8 Identity What is the genotype at the Q gene

You can add flavor, different textures, and nutrients to foods without adding too much fat. For example, top a casserole with croutons or bran flakes. Add sliced banana to a peanut butter sandwich or put beans in an omelet. Substitute one food for another. Use fresh spinach instead of iceberg lettuce or mash sweet potatoes instead of white potatoes. Write an essay about how you can change a standard family recipe or meal to add more flavor, texture, and nutrients.

Morrissey Industries sells on terms of 3/10, net 30. Total sales for the year are $900,000. Forty percent of the customers pay on Day 10 and take discounts; the other 60 percent pay, on average, 40 days after their purchases.

What is the average amount of receivables?