Question

Which of these events reduces cash holdings? A) The firm sells a parcel of land at...

Which of these events reduces cash holdings? A) The firm sells a parcel of land at a loss. B) The firm sells a parcel of land at a profit. C) The firm changes its terms of sale and gives customers less time to pay for their purchases. D) The firm pays more promptly for its raw materials.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2.         Maggie purchased a parcel of raw land from Carol on March 8, 20X1, for $200K, paying...
2.         Maggie purchased a parcel of raw land from Carol on March 8, 20X1, for $200K, paying $50K cash to Carol and assuming a $150K mortgage.  Maggie purchased the property as an investment.  On January 2, 20X2, Maggie took a second mortgage on the land in the amount of $25K.  On March 8, 20X2, Maggie sells the land to Beth for $225K, assumption of both mortgages and a motorhome with FMV of $15K. a.         What is Maggie’s basis in the raw land upon its purchase?...
If a firm wants to decrease its cash conversion cycle, which of the following actions should...
If a firm wants to decrease its cash conversion cycle, which of the following actions should it take? Assume everything else is equal. a. Loosen credit terms to increase the firm's sales. b. Delay payments made to suppliers so that the firm pays late. c. Purchase more raw materials to increase the average inventory the firm maintains. d. Increase the amount the firm borrows from its bank. e. Decrease the common equity on the firm's balance sheet.
Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit...
Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s_______ Consider the case of Stowe-Arts Holdings Co.: Stowe-Arts Holdings Co. has a very attractive credit policy, and none of...
2. Cash conversion cycle Cash management is a very important function of managers. Companies need to...
2. Cash conversion cycle Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash. Consider the case of the Red Hamster Manufacturing Corporation: Red Hamster Manufacturing Corporation has forecasted sales of $24,000,000 for next year and expects its cost of goods sold (COGS) to remain at 80% of sales. Currently, the firm holds $3,100,000 in inventories, $2,300,000 in accounts receivable,...
Cash conversion cycle Cash management is a very important function of managers. Companies need to manage...
Cash conversion cycle Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash. Consider the case of the Loud Noise Recordings Corporation: Loud Noise Recordings Corporation has forecasted sales of $27,000,000 for next year and expects its cost of goods sold (COGS) to remain at 70% of sales. Currently, the firm holds $3,200,000 in inventories, $1,900,000 in accounts receivable, and...
Which of the following statements are CORRECT? If a firm takes actions that increase its days...
Which of the following statements are CORRECT? If a firm takes actions that increase its days sales outstanding (DSO), then, other things held constant, this will shorten its cash conversion cycle (CCC). Other things held constant, if a firm "stretches" (i.e., delays paying) its accounts payable, this will lengthen its CCC. Other things held constant, adopting a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days will lengthen the...
Phoenix Lambert currently sells its goods cash-on-delivery. However, the financial manager believes that by offering credit...
Phoenix Lambert currently sells its goods cash-on-delivery. However, the financial manager believes that by offering credit terms of 2/10 net 30, the company can increase sales by 20%, without significant additional costs. If the interest rate is 6% and the profit margin is 8%, would you recommend offering credit? Assume first that all customers take the cash discount. Then assume they all pay on day 30. Joe’s hint: I would start by assuming the company has $100 in sales, and...
​(Preparation of a cash budget​) Lewis Printing has projected its sales for the first 8 months...
​(Preparation of a cash budget​) Lewis Printing has projected its sales for the first 8 months of 2016 as​ follows: January ​$120,000 April ​$280,000 July ​$200,000 February   140,000 May   275,000 August   200,000 March   170,000 June   200,000 ​(Click on the icon located on the​ top-right corner of the data table above in order to copy its contents into a spreadsheet.​) PrintDone . Lewis collects 30 percent of its sales in the month of the​ sale, 50 percent in the month following...
#1 Action Company, sells mood lights for $60 each. In 2018 Action anticipates selling 15,000 lights....
#1 Action Company, sells mood lights for $60 each. In 2018 Action anticipates selling 15,000 lights. The company has the following costs and inventory levels per light for the year: Direct materials $16 Direct manufacturing labor $18 Manufacturing overhead $10 Beginning inventory Ending inventory Direct materials 200 units 300 units Work-in-process inventory          0 units 0 units Finished goods inventory             2,100 units 1,500 units Calculate the following for Action in 2018. A) Budgeted income statement sales. B) Number of mood lights...
#1 Action Company, sells mood lights for $60 each. In 2018 Action anticipates selling 15,000 lights....
#1 Action Company, sells mood lights for $60 each. In 2018 Action anticipates selling 15,000 lights. The company has the following costs and inventory levels per light for the year: Direct materials $16 Direct manufacturing labor $18 Manufacturing overhead $10 Beginning inventory Ending inventory Direct materials 200 units 300 units Work-in-process inventory 0 units 0 units Finished goods inventory 2,100 units 1,500 units Calculate the following for Action in 2018. Budgeted income statement sales. Number of mood lights produced in...