Compute the cash cycle based on the following information

QUESTION 1
Compute the cash cycle based on
the following information:
Average Collection Period = 47
Accounts Payable Period = 40
Average Age of Inventory = 55

1 points

QUESTION 2

Month

Sales $

Month

Sales $

Jan

41,700

July

39,182

Feb

18,921

Aug

17,281

Mar

17,281

Sep

41,700

Apr

39,182

Oct

17,281

May

41,700

Nov

18,921

June

18,921

Dec

39,182

Sales are collected as follows:
In the month of Sales: 20%
In the next month: 28%
After 2 months: 10%
After 3 months: remainder is collected
Calculate the cash collection for December.
Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 3
Which one of the following is most indicative of a flexible
short-term financial policy?

Relatively high ratio of current assets to total assets

Relatively low level of
inventory

Relatively low level of
accounts receivable

Relatively high ratio of
short-term debt to total debt

Relatively low level of
liquidity

1 points

QUESTION 4

Month

Sales $

Month

Sales $

Jan

47,489

July

36,085

Feb

34,128

Aug

39,903

Mar

39,903

Sep

47,489

Apr

36,085

Oct

39,903

May

47,489

Nov

34,128

June

34,128

Dec

36,085

Sales are collected as follows:
In the month of Sales: 41%
In the next month: 30%
After 2 months: 6%
Remainder is considered as bad debt and is not collected.
Calculate the cash collection for June.
Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 5
OnJuly 15th, you purchased $10,000
worth of goods. The terms of the sale were 1/9, net 46. What is the effective
annual rate of interest for the credit period for this sale?
Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 6
Compute the Accounts Payable (A/P) period
based on the following information:
Average A/P balance = $67,660
Annual Cost of Goods Sold = $118,631
Assume 365 days
Enter your answer rounded off to two decimal
points. For example, if your answer is 12.345 then enter as 12.35 in the answer
box.

1 points

QUESTION 7
ABC Company has an average collection period of 41 days and
factors all of its receivables immediately at a 3 percent discount. Assume all
accounts are collected in full. What is the firm’s effective cost of borrowing?
Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 8
ABC Corporation currently has
an inventory turnover of 39.74, a payables turnover of 9.13, and a receivables
turnover of 21.02. How many days are in the operating cycle?
Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 9

Month

Sales $

Month

Sales $

Jan

20,740

July

27,944

Feb

42,200

Aug

32,693

Mar

32,693

Sep

20,740

Apr

27,944

Oct

32,693

May

20,740

Nov

42,200

June

42,200

Dec

27,944

Sales are collected as follows:
In the month of Sales: 34%
In the next month: 23%
After 2 months: 9%
After 3 months: remainder is collected
Calculate the cash collection for November.
Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 10
As of this morning, your firm
had a ledger balance of $3,854 with no outstanding deposits or checks. Today,
your firm deposited 8 checks in the amount of $444 each and wrote 3 checks in
the amount of $666 each. What is the amount of the disbursement float as of the
end of the day?
Do not enter $ or comma in the
answer box. For example, if your answer is $12.345 then enter as 12.35 in the
answer box.

1 points

QUESTION 11
ABC Company has annual sales of
$400,000 and cost of goods sold of $79,161. The accounts payable period is
34.53 days. What is the average accounts payable balance?
Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 12
Which of the following is a Source of Cash?
Choose only one.

Increase in long-term debt

Increase in current assets

decrease in current liabilities

Increase in fixed assets

decrease in equity

1 points

QUESTION 13
The terms of the sale were 3/14, net 51. What is the effective
annual rate of interest?
Enter your answer in percentages rounded off to two decimal
points. Do not enter % in the answer box.

1 points

QUESTION 14
ABC Company writes 180 checks a
day for an average amount of $663 each. These checks generally clear the bank
in 3 days. In addition, the firm generally receives an average of $178,948 a
day in checks that are deposited immediately. Deposited funds are available in
1 days. What is the firm’s net float?
Do not enter $ or comma in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 15
As of this morning, your firm
had a ledger balance of $4,885 with no outstanding deposits or checks. Today,
your firm deposited 7 checks in the amount of $231 each and wrote a check in
the amount of $877. What is the amount of the collection float as of the end of
the day?
Do not enter $ or comma in the
answer box. For example, if your answer is $12.345 then enter as 12.35 in the
answer box.

1 points

QUESTION 16
ABC Company has a cash cycle of
12.26 days, an operating cycle of 22.48 days, and an average collection period
of 5 days. The company reported cost of goods sold of $239,688. What is the
company’s average balance in Accounts Payable?
Enter your answer rounded off
to two decimal points. Do not enter $ or comma in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box

1 points

QUESTION 17

Month

Sales $

Month

Sales $

Jan

38,325

July

26,993

Feb

45,451

Aug

31,647

Mar

31,647

Sep

38,325

Apr

26,993

Oct

31,647

May

38,325

Nov

45,451

June

45,451

Dec

26,993

The company has estimated expenses as
follows:

General and administrative expenses: $4,408
Material purchases are 62 percent of sales. Material purchases are paid in the
month following the purchase.
Interest payment per month: $3,821
Rent expenses per quarter starting March: $6,356
Calculate the cash outflows for June.
Enter your answer rounded off to two decimal
points. Do not enter $ or comma in the answer box. For example, if your answer
is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 18
Identify which of the following will increase
the operating cycle. Choose only one.

Decrease in inventory turnover ratio

decrease in days’ sales in inventory

decrease in average collection period

decrease in accounts payable period

decrease in accounts payable turnover ratio

1 points

QUESTION 19
ABC Company has annual sales of
$473,747 and cost of goods sold of $198,600. The average accounts receivable
balance is $67,433. How many days on average does it take the firm to collect
its accounts receivable? Assume 365 days.
Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 20
ABC Corporation currently has
an inventory turnover of 24.11, a payables turnover of 12.9, and a receivables
turnover of 15.4. How many days are in the cash cycle?
Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points

QUESTION 21
Identify a source of cash from below. Choose
only one.

decrease in current liabilities

decrease in long-term debt

Increase in fixed assets

Decrease in accounts receivable

increase in inventory

1 points

QUESTION 22
Indicate the effect of the following on the
cash cycle: Accounts payable turnover goes up

No change

Increase

Decrease

1 points

QUESTION 23
Indicate the effect of the following on the
operating cycle: Customers take longer to make the payment

No change

Decrease

Increase

1 points

QUESTION 24
Indicate the effect of the following on the
operating cycle: Accounts payable goes up

No change

Increase

Decrease

 

 

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