FIN 5130 – ABC Company sells 3,961 chairs a year at an average price per chair
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FIN 5130 – ABC Company sells 3,961 chairs a year at an average price per chair 1. ABC Company sells 3,961 chairs a year at an average price per chair of $152. The carrying cost per unit is $22.72. The company orders 268 chairs at a time and has a fixed order cost of $123.5 per order. The chairs are sold out before they are restocked. What are the total shortage costs?Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.2. ABCâs next dividend is expected to be $0.83, its required return is 16%, its growth rate is 4%. What is ABC’s expected stock price in 18 years?3. ABCâs credit terms are 1/6, net 41. Based on experience, 64 percent of all customers take the discount. ABC has annual credit sales of $184,738. What is the average investment in accounts receivable as shown on the balance sheet?4.ABC Company has the following projected sales:MonthSales $April 34,972May 38,440June 37,490July 17,614ABC collects 64 percent of its sales in the month of sale, 20 percent in the month following the month of sale, and another 1 percent in the second month following the month of sale. The remainder is bad debts and is not collected. What is the amount of the July collections?5. The terms of the sale were 2/9, net 64. What is the effective annual rate of interest?6. ABC Corp. currently has an inventory turnover of 9, a payables turnover of 6.64, and a receivables turnover of 8.34. How many days are in the cash cycle?7. ABCâs last dividend paid was $5.86, its required return is 21%, its growth rate is 4%. What is ABC’s expected stock price in 9 years?8. The exchange rates in New York for $1 are C$1.2934 and Â£0.7701. A dealer is offering the following quote: C$1 will buy Â£0.8483. What is the profit you can earn on $19,934 using triangle arbitrage?9. ABC Company has annual sales of $504,518. The cost of goods sold are $408,322. The firm has an accounts receivable balance of $11,167 and an accounts payable balance of $11,285. How many days does it take the firm to pay its suppliers? Assume 365 days.10. ABC Company writes 394 checks a day for an average amount of $697 each. These checks generally clear the bank in 4 days. In addition, the firm generally receives an average of $151,031 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm’s net float?