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Unformatted text preview: Chapter 28 Problems 125 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Addin" be installed in Excel. To install these, click on "ToolsAddIns" and select "Analysis ToolPak and "Solver AddIn." k" Chapter 28 Question 1 Input Area: Units 200 Unit price $95 Terms 2% / 10 Net 30 Output Area: a. Days until account is overdue 30 Remittance $19,000 b. Discount 2% Discount period 10 Remittance $18,620 c. Implicit interest $380 Days of credit 20 Chapter 28 Question 2 Input Area: Annual sales $65,000,000 Collection period 48 # days per year 365 Output Area: Receivable turnover 7.604 Average receivables $8,547,945 Chapter 28 Question 3 Input Area: Terms 2 / 10 Net 30 Percentage taking discount 65% Sales price $2,200 Units sold per period 1,200 Periods per year 12 Output Area: a. ACP 17.00 b. Total annual sales $31,680,000 Receivables turnover 21.4706 Average receivables balance $1,475,506.85 Chapter 28 Question 4 Input Area: Credit sales $18,000 Collection period 29 Cost of production (% of sales) 80% Output Area: Daily sales $2,571.43 Average A/R $74,571.43 Chapter 28 Question 5 Input Area: Terms 2% / 9 Net 40 a. New discount 3% b. New credit period 60 c. New discount period 15 Output Area: EAR (original terms) 26.85% a. EAR 43.14% b. EAR 15.56% c. EAR 34.31% Chapter 28 Question 6 Input Area: Daily investment in receivables $46,000 Collection period 52 # days per year 365 Output Area: Receivables turnover 7.0192 Annual credit sales $322,884.62 Chapter 28 Question 7 Input Area: Terms 2% / 15 Net 40 Discount used % 60% New terms 4% / 10 New net 30 Units sold 4,000 Unit price $400 Output Area: Total credit sales $1,600,000 ACP 25.00 Receivables turnover 14.600 Average receivables $109,589.04 If the firm increases the cash discount, then more people will pay sooner, thus lowering the average collection period. If the ACP declines, receivables turnover increases, which will lead to a decrease in average receivables. Chapter 28 Question 8 Input Area: Average days past due...
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This note was uploaded on 12/14/2010 for the course FINC 311 taught by Professor Stanley,t during the Fall '08 term at Winthrop.
 Fall '08
 Stanley,T
 Finance

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