You own a small business that produces high quality cut flowers. While you have many customers your largest buyer is Blooming Smart Ltd, a large retail outfit with a national chain of outlets that accounts for 50% of your orders on average. Blooming Smart Ltd has now requested that you extend credit terms to them better than what you offer to your other buyers. 1)How could this affect your operating cycle?

You own a small business that produces high quality cut flowers. While you have many customers your largest buyer is Blooming Smart Ltd, a large retail outfit with a national chain of outlets that accounts for 50% of your orders on average. Blooming Smart Ltd has now requested that you extend credit terms to them better than what you offer to your other buyers. 1)How could this affect your operating cycle?

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter10: Cash Receipts And Cash Payments

Section: Chapter Questions

Problem 3A

See similar textbooks

Similar questions

A tree provider to plant nurseries is trying to use customer lifetime value to determine the value of its customers. Two customers are shown below. Use customer lifetime value to determine the importance of each customer. Use a 7 percent discount rate. Avg. Annual Sales Avg. Profit Margin Customer A: Customer B: $26,500 $14,000 Do not round intermediate calculans. Round your answers to the nearest dollar. NPV (Customer A): $ 25% 15% Expected Lifetime 11 years 7 years NPV (Customer B): $ What do you recommend? -Select- is more important.
A tree provider to plant nurseries is trying to use customer lifetime value to determine the value of its customers. Two customers are shown below. Use customer lifetime value to determine the importance of each customer. Use an 8 percent discount rate. Avg. Annual Sales Avg. Profit Margin 10% $12,500 $26,000 20% Do not round intermediate calculations. Round your answers to the nearest dollar. NPV (Customer A): $ NPV (Customer B): $ What do you recommend? Customer B ✓ Customer A: Customer B: is more important. Expected Lifetime 5 years 9 years
Assume all suppliers to a large retail chain offer credit terms of 2/10, net 30. The retail chain consistently takes the 2 percent discount and pays in 60 days. When pressed on the issue, the retail chain tells the suppliers they can either accept the payments as they currently are or lose the business. Is this ethical? How might this impact a small supplier versus a large supplier? Explain.
Solve each of the following questions using both pricing formulas and Excel. 5. You are managing a small company and need to buy some equipment for your product line. Kangaroo Manufacturing is offering free credit on a $20,000 piece of equipment. You pay down $2,000 and then $600 a month for the next 30 months. Turtle Machines does not offer free credit but will give you $2,000 off the list price. If the rate of interest is 10% (APR) a year, which company is offering a better deal?
Bob's Product Company takes 20 days to convert its raw materials to finished goods, 15 days to sell it, and 25 days to collect its credit sales. What is the company’s days receivable period? Group of answer choices 60 35 25 10 15 A bank letter of credit, sometimes called a standby letter of credit, is a written promise by a bank that it will make a payment on behalf of the customer. This is different than a line of credit, which is a akin to a credit card….a line of credit allows the company to borrow funds as needed to pay any bills. A LETTER of credit is specific to the party that the company might owe money to. Group of answer choices True False
Imagine you have a business, you are selling a one of a kind gadget, the cost you incurred for the materials is 2,000 and you wanted to sell it at P3,000. However, you are paying a rent of P20,000 for your business operation. How many units do you think you need to sell in order not to incur losses or able to earn. What will you do to achieve a profit?
PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULASCC2) La Reina de Oriente, S.A., a company that sells sausages, knows that it pays its suppliers 10 times a year. To determine the average collection period it is known that the annual sales of the company were $5'183,220.00, of which 70% are on credit and the average balance of customers is $382,982.37, that is to say it is necessary to calculate the turnover of accounts receivable; and the average age of inventory is based on the inventory turnover, whose data to calculate it as the previous one are: Average inventory 153,192.95 and its annual cost of sales amounts to $1'002,716.78. The company spends about $12.5 million in operating cycle investments. It plans to make modifications to its policies so that it can reduce its PPC by 5 days, and its EPI by one (before converting it to days). Negotiations with your supplier to extend payment terms have not been…
Your store sells notebooks at P80.00. You make 7% profit on these items. The product has not been selling well and you are considering having a promo. If running a promo event costs you P800.00 to implement, and you'd like to offer the merchandise at P76.00, how much do you have to sell to break even?
Solve what is asked and show detailed solutions. 1. A watch store owner dcided to offer 20% discount for a particular brand of watch that sells at P35,000.00. By doing so, his average sales increased from 5 watcher to 12 watches a day. if he bought one watch at a price of P22,000.00 fom the supplier, bw how much was his daily profit increased or decreased by offering such discount on watch?
I need help answering the questions below... 1. Using the assumptions provided in Excel Spreadsheet, what is the total number of customers generated from this advertising? 2. If Dr. Corneal’s customers spend $300 on average, what is the total revenue generated from this advertising? 3. The cost to purchase the advertising is as follows: Google Ads: $5,000 Newspapers: $3,000 Magazines: $6,000 Radio: $1,000 Calculate the overall ROI and the ROI per advertising source. How do these number help you plan your advertising budget going forward? To answer this question, define ROI, explain how ROI is used (see your book), apply the numbers you have calculated and show how you would use these numbers for planning purposes. Note - ROI is expressed as a percent. ROI= (Revenue - Costs)/Costs
Joe’s Jewellery has 45 stores in major malls acround the country. They are considering starting an online business which will require a substantial investment in technology. What are benefits they could not quantify using NPV?
3. Tim is looking at buying business cards from two differentcompanies. Company A, charges $50 for the design plus 10 cents foreach business card. Company B, charges $5 for the initial design plus 25cents for each business card. Find the cost function, A(q), that gives thecost of buying q business cards for company A. Find the cost function,B(q), that gives the cost of buying q business cards for company B. Findthe quantity of business cards that makes the cost of the cards equal. IfTim is a small business and only need 200 business cards at one time.Which company should he go with? Explain your reasoning.