21. The PRIMARY reason given by those companies that impose credit limits is: to

Question

21. The PRIMARY reason given by those companies that impose credit limits is:
to control risk exposure
because of customer's financial position
to improve the supplier's perceived status by signaling selectivity
because of experience with customer


22. The operating motive for offering trade credit suggests that the amount of credit extended by a business is an alternative to
increasing or decreasing the level of inventories
closing down a business
defaulting on a short-term bank loan
billing more aggressively on contracts with suppliers


23.
Which of the following are advantages that credit sellers have over ban


Information advantage
Control advantage
Salvage value advantage
‘a’ and ‘b’
all of the above


24. Emily Cheney is evaluating a proposal to extend credit to a group of new customers. The new customers will generate an average of $40,000 per day in new sales. On average, they will pay in 68 days. The variable cost ratio is 80%, collection expenses are 2% of sales, and the cost of capital is 10%. What is the NPV of one day's sales if Emily grants credit? Assume that there is no bad debt loss.
$4,226.81
$5,190.78
$6,483.06
$7,200.00


25. Traditional but flawed measures used to monitor receivables balances include each of the following except:
uncollected balance percentages
the aging schedule
accounts receivable turnover
days sales outstanding

Explanation / Answer

Can say how to solve task ?24? I have no ideas. I calculate that Net Income is 7200 but how to calculate NPV??! Please answer as soon as possible!!!!!!!

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