Question 1 a) The very FIRST step in calculating the ACCOUNTS RECEIVABLE value i

Question

Question 1a)

The very FIRST step in calculating the ACCOUNTS RECEIVABLE value is to calculate:

Calculate the average accounts receivable for each year.

Calculate the revenue for each year

Calculate the amount of costs of goods sold for each year

None of the above

Question 1b)

To calculate the inventory value for each year we will:

Take 1/12 of the cost of goods except for 1st year

Take 1/12 of sales for each year including 1st year

Take a monthly average of sales for each year

None of the above

Question 1c)

The cost of debt to the firm (us) is the same as what to the investor?

Yield to Maturity

Yield on the Stock

Yield on the Investment in the Building

Yield on the Project

Question 1d)

The Kdat for BAXTER is equal to 7.2% but the Yield to the Investor in the bond is equal to 12.00%, why is that?

Because the investor wants more return

Because the firm wants to pay out less

Because the firm has a tax break when issuing stocks

Because the firm has a tax break for paying interest

Because the investor and the firm disagree on the rate of return to be paid

Calculate the average accounts receivable for each year.

Calculate the revenue for each year

Explanation / Answer

Question 1a)

The very FIRST step in calculating the ACCOUNTS RECEIVABLE value is to calculate:

Ans : Calculate the revenue each year.

Question 1b)

To calculate the inventory value for each year we will:

Option is none of Above as inventory cannot be calculated by given methods.

Question 1c)

The cost of debt to the firm (us) is the same as what to the investor?

Option is Yield to Maturity : YTM is same to investor as cost of debt to firm.

Question 1d)

The Kdat for BAXTER is equal to 7.2% but the Yield to the Investor in the bond is equal to 12.00%, why is that?

Ans : Because the firm has a tax break for paying interest

The post tax cost becomes lesser for BAXTER.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.