This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Parsons Company has a cash flow problem. The company owes its suppliers 300,000 on credit terms of ... (Read 69 times)

roselinechinyere27m

  • Hero Member
  • *****
  • Posts: 557
on: Jul 10, 2018
Parsons Company has a cash flow problem. The company owes its suppliers 300,000 on credit
  terms of 2/10 net 40, but Parsons doesn't have the cash to pay during the discount period. Parsons,
  however, can borrow the 300,000 at annual rate of 24.
 
  Should Parsons borrow the money to pay
  its accounts payable?
  A) Yes, the effective cost of forgoing the discount is greater than 24.
  B) No, the effective cost of forgoing the discount is equal to 24, and there are transactions costs
  associated with borrowing.
  C) No, additional borrowing will cost more for interest (60,000 per year) than the discount is
  worth.
  D) It doesn't matter because the present value of the cost of borrowing is exactly equal to the
  amount of the discount for paying within 10 days.

Question 2

A firm's cash position would most likely be hurt by
 
  A) increasing the net profit margin. B) retiring outstanding debt.
  C) decreasing excess inventory. D) establishing stricter (shorter) credit terms
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

SVictor

  • Sr. Member
  • ****
  • Posts: 365
Reply #1 on: Jul 10, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 58% of students answer this correctly


roselinechinyere27m

  • Member
  • Posts: 557
Reply 2 on: Jul 10, 2018
Gracias!

abro1885

  • Member
  • Posts: 337
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

It is important to read food labels and choose foods with low cholesterol and saturated trans fat. You should limit saturated fat to no higher than 6% of daily calories.

A radiator may be either a down-flow or a cross-flow type. A radiator may be either a down-flow or a cross-flow type.
Spring force, crankcase pressure, and intake manifold vacuum work together to regulate the flow rate ... Spring force, crankcase pressure, and intake manifold vacuum work together to regulate the flow rate ...
Diagram of Cross Flow Air Dryer Diagram of Cross Flow Air Dryer
Flow cytometry. Cells expressing the surface markers CD4, CD8, and CD3 are labeled in a direct ... Flow cytometry. Cells expressing the surface markers CD4, CD8, and CD3 are labeled in a direct ...
How to solve a word problem involving trigonometric models (Question 1) How to solve a word problem involving trigonometric models (Question 1)
linear programming problem, applying simplex method and sensitivity analysis linear programming problem, applying simplex method and sensitivity analysis
Video: Arthritis

For a complete list of videos, visit our video library