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o-na [289]
2 years ago
6

The Reynolds Corporation buys from its suppliers on terms of 2/19, net 50. Reynolds has not been utilizing the discounts offered

and has been taking 50 days to pay its bills. Ms. Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of 17 percent. The bank requires a 10 percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement. a. Calculate the cost of not taking a cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Business
1 answer:
harina [27]2 years ago
4 0

Answer:

23.68%

Explanation:

The computation of the cost of not taking a cash discount is shown below:-

Cost of not taking a cash discount = [Discount percentage ÷ (100% - Disc.%)] × (360 ÷ (Final due date - Discount period))

= (2% ÷ 98%) × (360 ÷ (50 - 19))

= 2.04% × 11.61

= 23.68%

Therefore for computing the cost of not taking a cash discount we simply applied the above formula.

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The optimal capital structure has been achieved when the A. weight of equity is equal to the weight of debt. B. debt-equity rati
pishuonlain [190]

Answer:

debt-equity ratio results in the lowest possible weighted average cost of capital.

Explanation:

The debt equity ratio measures how well a business's equity can account for its debt.

Weighted average cost of capital is referred to as a business's cost of capital and is the rate a company is expected to pay to its shareholders.

When the debt equity ratio results in the lowest weighted average cost of capital, it indicates that the cost of finding for the company is low. This is the optimal and least expensive capital structure.

5 0
2 years ago
Assume you are the COO of Barcelona Restaurants and you are in a heated disagreement with one of your restaurant managers over h
AlexFokin [52]

Answer:

The correct answer is letter "C": Accommodating.

Explanation:

By accommodating managers have to adjust their plans according to current situations happening at the workplace. Problematic situations must be solved quickly but they can also represent a chance to spot weaknesses of the organization that should be reviewed. If a method of working shall be modified or if there is a need to use the company's resources to make adjustments on the issue, top managers have the power to do so.

Thus, <em>accommodating will be useful for the COO of Barcelona Restaurants to join his method of working with one of the manager's style.</em>

7 0
2 years ago
Bell’s Shop can make 1000 units of a necessary component with the following costs: Direct Materials $24000 Direct Labor 6000 Var
Korolek [52]

Answer:

8,000= fixed overhead

Explanation:

Giving the following information:

Bell’s Shop can make 1000 units of a necessary component with the following costs:

Direct Materials $24000

Direct Labor 6000

Variable Overhead 3000

Fixed Overhead ?

The company can purchase the 1000 units externally for $39000. The unavoidable fixed costs are $2000 if the units are purchased externally.

Buy= 41,000/1,000= $41

Total Unitary cost= 24,000 + 6,000 + 3,000 + fixed overhead

41,000= 33,000 + fixed overhead

8,000= fixed overhead

3 0
2 years ago
Lucia is using cost-volume-profit analysis to predict profits for a new product line. Which of the following reflect how Lucia’s
tino4ka555 [31]

Lucia’s analysis is subject to assumptions because(c) The analysis lacks validity if the total fixed costs required for the calculated break-even point generates too low of capacity.

Explanation:

Cost-volume-profit analysis is used to make short-term decisions.

Cost-volume-profit (CVP) analysis is used to study the changes in cost and volume and how its impact on the company's operating income and net income.

While  performing <u>Cost-volume-profit (CVP) analysis</u>  several assumptions are made like assuming the  Sales price per unit to be  constant. Variable costs per unit  to be constant.

The five basic component of CVP analysis includes

  • volume or level of activity
  • unit selling price
  • variable cost per unit
  • total fixed cost
  • sales mix.

5 0
2 years ago
DonutVille caters to its retirement population by selling over 10,000 donuts each week. To produce that many donuts weekly, Donu
nata0808 [166]

Answer:Flour should be acquired through a contract.

Explanation: Acquiring flour through a contact will be very important for DonutVille as it will ensure a follow-up and a feedback system where the manager of DonutVille establish a relationship with the company supplying the flour through one of its distributors or agents.

When purchasing of flour is achieved through a contact, it makes the contact a responsible person who will be needed to guarantee the supply of flour on time and to Communicate with the manager of DonutVille should there be any matters arising in the process getting supplies.

8 0
2 years ago
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