Finance

Note: To receive credit, show work on all problems (It can be shown as Excel or financial calculator inputs as well) on either this sheet or in Excel.

1. Financial information for the Hewlett Packard Corporation (HPQ) and General Motors Corporation (GM) are found below:

Don't use plagiarized sources. Get Your Custom Essay on
Finance
From as low as $9/Page
Order Essay

$ in thousands
31-Oct-08 Hewlett Packard 31-Oct-08 General Motors

Sales 118,364,000 148,979,000
Cost of goods sold 89,592,000 150,603,000
Accounts receivable 29,359,000 7,711,000
Inventories 7,879,000 16,405,000
Accounts payable 32,317,000 24,827,000
Current assets 51,728,000 41,324,000
Current liabilities 52,939,000 73,934,000

Compute the cash conversion cycle for both of these companies

2. Network Solutions just introduced a new, fully automated manufacturing plant that
produces 2,000 wireless routers per day with materials costs of $50 per router and no
other costs. The average number of days a router is held in inventory before being sold
is 45 days. In addition, they generally pay their suppliers in 30 days, while collecting
from their customers after 25 days.

a. What is the cash conversion cycle?

b. What would happen to the cash conversion cycle if they could stretch their payments
to suppliers from 30 days to 50 days?

3) Ashley’s Delivery Service is analyzing the credit terms of each of three suppliers, A, B, and C.

(a) Determine the approximate cost of giving up the cash discount.

4. If a firm buys on trade credit terms of 2/10, net 50 and decides to forgo the trade credit discount
and pay on the net day, what is the annualized cost of forgoing the discount (assume a
360 day year) ?

5. You plan to borrow $20,000 from the bank to pay for inventories for a gift
shop you have just opened. The bank offers to lend you the money at 10 percent annual
interest for the 6 months the funds will be needed (assume a 360 day year).

Calculate the annualized rate of interest on the loan.

6. Tiger Corporation purchases 1,200,000 units per year of one
component. The fixed cost per order is $25. The annual carrying cost of the item
is 27% of its $2 cost.

a. Calculate the EOQ

7. Alexis Company uses 800 units of a product per year on a continuous basis. The product has a fixed cost of $50 per order, and its carrying cost is $2 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days’ usage in inventory as a
safety stock.

a. Calculate the EOQ.

The Homework Writings
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.

Free Revisions

All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.

Title-page

A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.

Bibliography

Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.

Originality & Security

At thehomeworkwritings.com, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.

24/7 Customer Support

Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work around the clock to see best customer experience.

Pricing

Flexible Pricing

Our prices are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.

Communication

Admission help & Client-Writer Contact

When you need to elaborate something further to your writer, we provide that button.

Deadlines

Paper Submission

We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.

Reviews

Customer Feedback

Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.