Unformatted text preview: Your company is considering a regional lockbox system to speed up collections which it believes will reduce A/R by 20 percent. The annual cost of the system is $15,000. What is the estimated net annual savings to the firm from implementing the lockbox system? A. $500,000 B. $ 30,000 C. $ 60,000 D. $ 55,000 E. $ 40,000 3. The accounts of your company indicate the following changes in long-term assets and capital for the past year: (1) Fifty thousand (50,000) shares of common stock were sold at $25 per share. (2) Two million dollars ($2 million) in bonds matured and were retired. (3) Dividends of $1 million were paid. (4) Net fixed assets declined by $200,000. (5) Net income was $2 million. (6) Depreciation expense was $1.5 million. What was the increase or decrease in net working capital? (Hint: Changes in net fixed assets incorporate changes in both gross fixed assets and accumulated depreciation.) A. $ 450,000 B. -$ 250,000 C. -$1,950,000 D. $1,950,000 E. $3,300,000...
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- Spring '08
- Balance Sheet, Generally Accepted Accounting Principles, cash conversion cycle, CFO, current asset management