1.      Pepito Company sells on terms of 3/10, net 30. Gross...

1.      Pepito Company sells on terms of 3/10, net 30. Gross sales for the year are P1,200,000 AND THE COLLECTION DEPARTMENT ESTIMATES THAT 30 PERCENT OF THE CUSTOMERS PAY On the tenth day and take discounts; 40 percent pay on the thirtieth day; and the remaining 30 percent pay, on average, 40 days after the purchase. Assume 360 days per year. What is the average collection period?

a.      20 days

b.     27 days

c.      13 days

d.     10 days

2.      Pepito Company sells on terms of 3/10, net 30. Gross sales for the year are P1,200,000 AND THE COLLECTION DEPARTMENT ESTIMATES THAT 30 PERCENT OF THE CUSTOMERS PAY On the tenth day and take discounts; 40 percent pay on the thirtieth day; and the remaining 30 percent pay, on average, 40 days after the purchase. Assume 360 days per year. What current receivable balance?

a.      80,000

b.     75,000

c.      60,000

d.     90,000

3.      CLRM Company is planning to relax its credit standards to boost sales. As a result, sales are expected to increase 16 percent from 3,000 units per year to 3,480 units per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1.5 percent level. The price per unit is P4,250, the variable cost per unit is P3,060. The firms required return on investment is 20 percent. What is the firms additional profit contribution from sales under the proposed relaxation of credit standards?

a.      4,379,000

b.     571,200

c.      428,400

d.     142,800

4.      CLRM Company is planning to relax its credit standards to boost sales. As a result, sales are expected to increase 16 percent from 3,000 units per year to 3,480 units per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1.5 percent level. The price per unit is P4,250, the variable cost per unit is P3,060. The firms required return on investment is 20 percent. What is the cost of marginal investments in accounts receivable under the proposed plan?

a.      87,677

b.     90,090

c.      19,445

d.     83,640

5.      CLRM Company is planning to relax its credit standards to boost sales. As a result, sales are expected to increase 16 percent from 3,000 units per year to 3,480 units per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1.5 percent level. The price per unit is P4,250, the variable cost per unit is P3,060. The firms required return on investment is 20 percent. What is the cost of marginal bad debts under the proposed plan?

a.      38,838

b.     168,300

c.      258,923

d.     19,445

6.      CLRM Company is planning to relax its credit standards to boost sales. As a result, sales are expected to increase 16 percent from 3,000 units per year to 3,480 units per year. The average collection period is expected to increase to 40 days from 30 days and bad debts are expected to double the current 1.5 percent level. The price per unit is P4,250, the variable cost per unit is P3,060. The firms required return on investment is 20 percent. What is the net result of implementing the proposed plan?

a.      +168,274

b.     -312,474

c.      -168,274

d.     +319,260

7.      Tuesta borrowed P100,000 from a bank a one year 8% term loan with interest compounded quarterly. What is the effective annual interest on the Joan?

a.      8%

b.     8.24%

c.      9.12%

d.     2%

8.      Bublin Company applies for one year, P1 million loan from RY Bank. The term of the loan requires 12% per annum interest, compounded semi-monthly and will be paid together with the principal at the end of the year. How much total interest will be paid at the end of the year?

a.      136,036

b.     137,870

c.      127,160

d.     132,796

9.      A firm buys on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. It purchases total P1,080,000 per year. How much "non-free" trade credit does the firm use on average each year?

a.      60,000

b.     90,000

c.      30,000

d.     120,000