Suppose your firm receives a $4.34 million order on the last day of the year. You fill the order with $1.82 million worth of inventory. The customer picks up the entire order the same day and pays $1.17 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $3.17 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following: a. Revenues d. Inventory e. Cash b. Earnings c. Receivables a. Revenues Revenues will increase by $ million. (Select from the drop-down menu and round to two decimal places.) b. Earnings Earnings will increase by $million. (Select from the drop-down menu and round to two decimal places.) c. Receivables Receivables will increase by $ million. (Select from the drop-down menu and round to two decimal places.)
Suppose your firm receives a $4.34 million order on the last day of the year. You fill the order with $1.82 million worth of inventory. The customer picks up the entire order the same day and pays $1.17 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $3.17 million within 40 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes). Determine the consequences of this transaction for each of the following: a. Revenues d. Inventory e. Cash b. Earnings c. Receivables a. Revenues Revenues will increase by $ million. (Select from the drop-down menu and round to two decimal places.) b. Earnings Earnings will increase by $million. (Select from the drop-down menu and round to two decimal places.) c. Receivables Receivables will increase by $ million. (Select from the drop-down menu and round to two decimal places.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 9MC: Now assume that it is several years later. The brothers are concerned about the firm’s current...
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