Answer:
The present value of terminal value is $ 863,689.48
Explanation:
Terminal value=Cash flows at third year*(1+g)/WACC-g
cash flows at the third year is $64,000
g is the growth rate of net cash flows which is 2% in perpetuity
WACC is 8%
Terminal value=$64,000*(1+2%)/(8%-2%)
=$64000*1.02/0.06
=$ 1,088,000.00
The present value of terminal=terminal value*discount factor in year 3
discount factor in year=1/(1+8%)^3=0.793832241
Present value of terminal cash flow=1,088,000.00 *0.79383224
=$ 863,689.48
Answer:
Receivable days are 52 days.
Explanation:
Receivable days can be found from the following formula:
Receivables days = Receivables / Credit Sales * 365
The credit sales here is $6,650,000 during the year and the average receivables days is $950,000 [(950,000 + 980,000)/2] during the year. By putting the values we have:
Receivables days = $950,000 / $6,650,000 * 365 = 52 days
So the average receivable collection days were 52 days during the year.
Answer:
Answer for the following statement is "C"
Explanation:
- Sale of Gar's receivable accounts to Ross, with the possibility of noncollectable accounts being passed to Ross.
- Non-recourse factoring helps a corporation to offer its invoices to a component without any duty to accept unpaid invoices.
- If consumers refuse to pay their bills or pay their invoices late, all damages are borne by the element, making the company unregulated.
