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SOLUTIONS TO finman1

# SOLUTIONS TO finman1 - SOLUTIONS TO END-OF-CHAPTER PROBLEMS...

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SOLUTIONS TO END-OF-CHAPTER PROBLEMS Solutions to Problem Set A 20-1A. b c 360 x a 1 a - - where a = amount of the discount b = the discount period c = the net period 02 . 0 1 02 . 0 - x 10 50 360 - = 18.37% 20-2A. b c 360 x a 1 a - - where a = amount of the discount b = the discount period c = the net period 02 . 0 1 02 . 0 - x 20 30 360 - = 73.47% 20-3A. b c 360 x a 1 a - - where a = amount of the discount b = the discount period c = the net period (a) 01 . 0 1 01 . 0 - x 10 20 360 - = 36.36% (b) 02 . 0 1 02 . 0 - x 10 30 360 - = 36.73% (c) 03 . 0 1 03 . 0 - x 10 30 360 - = 55.67%

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(d) 03 . 0 1 03 . 0 - x 10 60 360 - = 22.27% (e) 03 . 0 1 03 . 0 - x 10 90 360 - = 13.92% (f) 05 . 0 1 05 . 0 - x 10 60 360 - = 37.89% 20-4A. Applicant #1 Z = 3.3(0.2) + 1.0(0.2) + 0.6(1.2) + 1.4(0.3) + 1.2(0.5) Z = 0.66 + 0.2 + 0.72 + 0.42 + 0.6 Z = 2.6 < 2.7 thus, reject Applicant #2 Z = 3.3(0.2) + 1.0(0.8) + 0.6(1.0) + 1.4(0.3) + 1.2(0.8) Z = 0.66 + 0.8 + 0.6 + 0.42 + 0.96 Z = 3.44 > 2.7 thus, accept Applicant #3 Z = 3.3(0.2) + 1.0(0.7) + 0.6(0.6) + 1.4(0.3) + 1.2(0.4) Z = 0.66 + 0.7 + 0.36 + 0.42 + 0.48 Z = 2.62 < 2.7 thus, reject Applicant #4 Z = 3.3(0.1) + 1.0(0.4) + 0.6(1.2) + 1.4(0.4) + 1.2(0.4) Z = 0.33 + 0.4 + 0.72 + 0.56 + 0.48 Z = 2.49 < 2.7 thus, reject Applicant #5 Z = 3.3(0.3) + 1.0(0.7) + 0.6(0.5) + 1.4(0.4) + 1.2(0.7) Z = 0.99 + 0.7 + 0.30 + 0.56 + 0.84 Z = 3.39 > 2.7 thus, accept Applicant #6 Z = 3.3(0.2) + 1.0(0.5) + 0.6(0.5) + 1.4(0.4) + 1.2(0.4) Z = 0.66 + 0.5 + 0.30 + 0.56 + 0.48 Z = 2.5 < 2.7 thus, reject 20-5A. (a) Sales sold goods of cost Sales - = Gross Profit Margin
\$600,000 sold goods of Cost \$600,000 - = 0.10 Cost of goods sold = \$540,000 inventory Average sold goods of Cost = Inventory turnover ratio inventory Average \$540,000 = 6 Average inventory = \$90,000 (b) Inventory turnover ratio = Period Collection Average 360 Inventory turnover =

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