Finance Net Float Quiz

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Finance Net Float

1. The terms of the sale were 2/14, net 51. What is the effective annual rate of interest?
2. As of this morning, your firm had a ledger balance of $4,881 with no outstanding deposits or checks. Today, your firm deposited 6 checks in the amount of $302 each and wrote 13 checks in the amount of $898. What is the amount of the disbursement float as of the end of the day?
3. ABC Company sells 4,595 chairs a year at an average price per chair of $144. The carrying cost per unit is $39.13. The company orders 486 chairs at a time and has a fixed order cost of $71.1 per order. The chairs are sold out before they are restocked. What are the total shortage costs?
4. ABC Company writes 331 checks a day for an average amount of $591 each. These checks generally clear the bank in 3 days. In addition, the firm generally receives an average of $170,481 a day in checks that are deposited immediately. Deposited funds are available in 1 days. What is the firm’s net float?
5. ABC Company sells 3,136 chairs a year at an average price per chair of $156. The carrying cost per unit is $18.34. The company orders 500 chairs at a time and has a fixed order cost of $54 per order. The chairs are sold out before they are restocked. What is the economic order quantity?
6. ABC Company has an average collection period of 38 days and factors all of its receivables immediately at a 1.5 percent discount. Assume all accounts are collected in full. What is the firm’s effective cost of borrowing?
7. On July 15^th, you purchased $10,000 worth of goods. The terms of the sale were 3/5, net 56. What is the effective annual rate of interest for the credit period for this sale?
8. ABC Company sells 2,234 chairs a year at an average price per chair of $199. The carrying cost per unit is $24.78. The company orders 368 chairs at a time and has a fixed order cost of $131 per order. The chairs are sold out before they are restocked. How many orders will company place if it follows the economic order quantity model?
9. ABC Company has a cash cycle of 12.48 days, an operating cycle of 21.39 days, and an average collection period of 5 days. The company reported cost of goods sold of $238,279. What is the company’s average balance in Accounts Payable?
10. ABC Company sells 2,693 chairs a year at an average price per chair of $128. The carrying cost per unit is $33.28. The company orders 322 chairs at a time and has a fixed order cost of $33.8 per order. The chairs are sold out before they are restocked. What are the total carrying costs?
11. ABC Company sells 5,883 chairs a year at an average price per chair of $193. The carrying cost per unit is $27.19. The company orders 500 chairs at a time and has a fixed order cost of $54 per order. The chairs are sold out before they are restocked. What is the economic order quantity?
12. As of this morning, your firm had a ledger balance of $3,903 with no outstanding deposits or checks. Today, your firm deposited 4 checks in the amount of $255 each and wrote a check in the amount of $868. What is the amount of the collection float as of the end of the day?

Finance Net Float

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Finance Net Float

Most important function performed by the Exim bank

Among the widespread benefits of the increasing globalization is the increase of international trade. However, the growth of international trade and increased trade volumes may incapacitate many small and medium ventures, and in some instances even the large enterprises. To address the challenges of financing above what commercial banks would provide, the Department of Commerce created the Export Import Bank.

The major function of the Exim Bank is the provision of financing and other financial tools to facilitate the completion of the international sale of US commodities (Export-Import Bank of the United States, n.d.). This function allows for the provision of a level playing field for American businesses to compete effectively in the global market place……

Finance Net Float

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