Questions
Limo Ltd is a small family owned company that has been suffering from the credit crunch...

Limo Ltd is a small family owned company that has been suffering from the credit crunch and has very limited borrowing power. The company gets it finance mainly from bank overdraft which has been tightened up and the interest rate has been increasing.
One of the main problems is that the company suffers from the late payment of their debtors and even default. Limo offers credit to all of its customers and most of them pay after the due dates. The board of directors decided to look into their cash flow situation and new proposal were put forward for consideration.
1. Delaying payment to creditors: at the moment Limo pays its creditors on 30 days from invoice. Often the invoice is received before the good arrived. The credit manager proposed delaying payment to creditors till customers pay.
2. Offering discount for prompt payment to debtors. At the moment the debtor payment system is as follow:
· 0nly 20% of customers pay within one month
· 15% pay after two month
· As many as 50% pay after three month and
· 13% pay take four months to pay
The board of director consider this patter unacceptable and wants to bring payment forward. A marketing research conducted last month showed that if a two-part-term is introduced for payment within 1 month at 2.5% discount then the patter will improve as follows:
· As many as 70% will take the discount and pay within one month
· Only 5% will pay within two month
· 10% will pay within three month and
· And the payment after four month increases by 1% to 14%
3. The company may try to negotiate a five year loan backed up by one of the marketable assets.
The company’s cost of capital is 15% and the annual turnover is £12m.
You are required to:
a) Discuss the different options and make some recommendations.
b) Evaluate the discount for prompt payment to see whether or not such a scheme is worth introducing (it is necessary to compute the expected costs and benefits of the discounts).
c) Discuss other additional benefits of introducing a prompt payment schemes

In: Accounting

Limo Ltd is a small family owned company that has been suffering from the credit crunch...

Limo Ltd is a small family owned company that has been suffering from the credit crunch and has very limited borrowing power. The company gets it finance mainly from bank overdraft which has been tightened up and the interest rate has been increasing.
One of the main problems is that the company suffers from the late payment of their debtors and even default. Limo offers credit to all of its customers and most of them pay after the due dates. The board of directors decided to look into their cash flow situation and new proposal were put forward for consideration.
1. Delaying payment to creditors: at the moment Limo pays its creditors on 30 days from invoice. Often the invoice is received before the good arrived. The credit manager proposed delaying payment to creditors till customers pay.
2. Offering discount for prompt payment to debtors. At the moment the debtor payment system is as follow:
· 0nly 20% of customers pay within one month
· 15% pay after two month
· As many as 50% pay after three month and
· 13% pay take four months to pay
The board of director consider this patter unacceptable and wants to bring payment forward. A marketing research conducted last month showed that if a two-part-term is introduced for payment within 1 month at 2.5% discount then the patter will improve as follows:
· As many as 70% will take the discount and pay within one month
· Only 5% will pay within two month
· 10% will pay within three month and
· And the payment after four month increases by 1% to 14%
3. The company may try to negotiate a five year loan backed up by one of the marketable assets.
The company’s cost of capital is 15% and the annual turnover is £12m.
You are required to:
a) Discuss the different options and make some recommendations.
b) Evaluate the discount for prompt payment to see whether or not such a scheme is worth introducing (it is necessary to compute the expected costs and benefits of the discounts).
c) Discuss other additional benefits of introducing a prompt payment sch

In: Accounting

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The...

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year.

Commercial

Residential

Revenues $298,800 $475,000
Direct materials costs $30,000 $50,000
Direct labor costs 118,300 312,500
Overhead costs 94,100 242,400 150,000 512,500
Operating income (loss) $56,400 $(37,500)


The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed:

Activity Cost Pools

Estimated Overhead

Cost Drivers

Scheduling and travel $98,000 Hours of travel
Setup time 88,100 Number of setups
Supervision 58,000 Direct labor cost
Expected Use of Cost Drivers per Product

Commercial

Residential

Scheduling and travel 950 530
Setup time 430 250

Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 12.25.)

Overhead Rates

Scheduling and travel

$

Setup time

$

Supervision %

eTextbook and Media

Partially correct answer iconYour answer is partially correct.

Determine the overhead cost assigned to each product line. (Round answers to 0 decimal places, e.g. 1,575.)

Commercial

Residential

Scheduling and travel

$

$

Setup time

$

$

Supervision

$

$

Total cost assigned

$

$

eTextbook and Media

Incorrect answer iconYour answer is incorrect.

Compute the operating income for each product line, using the activity-based overhead rates. (Round answers to 0 decimal places, e.g. 1,575.)

Operating income (loss)

Commercial $
Residential $

In: Accounting

Stocks A and B have expected returns of 8% and 10%, and standard deviations of 12%...

Stocks A and B have expected returns of 8% and 10%, and standard deviations of 12% and 18%, respectively. Calculate the expected return and standard deviation of equally weighted portfolios of the two stocks if the correlation between the two stocks is 0.5? Repeat the calculation for correlation of 0 and -0:5. If you could set the correlation between the two stocks, which of the three values would you choose? Explain.

In: Finance

The settlement of foundations is typically the result of three separate occurrences that take place in...

The settlement of foundations is typically the result of three separate occurrences that take place in the soil which provides support. List these factors and give a brief description of each.

Explain the difference between soil compression, soil consolidation, and compaction. Explain the difference between a normally consolidate and an over-consolidated soil deposit.   

Please type your answer instead of writing out your answer on paper.

In: Civil Engineering

The waiting times between a subway departure schedule and the arrival of a passenger are uniformly...

The waiting times between a subway departure schedule and the arrival of a passenger are uniformly distributed between 0 and 9 minutes. Find the probability that a randomly selected passenger has a waiting time less than 0.75 minutes.

Find the probability that a randomly selected passenger has a waiting time less than 0.75 minutes.

(Simplify your answer. Round to three decimal places as​ needed.)

In: Statistics and Probability

Which of the following is false when conducting an analysis of variance? Group of answer choices...

Which of the following is false when conducting an analysis of variance?

Group of answer choices

The difference between three or more means will be examined

The Type I error rate is inflated automatically compared to the t test for independent samples even if you use the same alpha

Specific differences between pairs of means are not known when a significant result is found

Two estimates of the population variance are compared

In: Statistics and Probability

What does it mean for a quantity to be conserved? Why are conserved physical quantities useful...

What does it mean for a quantity to be conserved? Why are conserved physical quantities useful to physicists? Give an example which illustrates the difference between three kinds of energy and the transformation of energy from one kind to another. Your example may include some of the following kinetic, thermal, gravitational potential, and spring potential energy. In your example explain the difference between Energy, Work, and Power.

In: Physics

In a certain lottery game, you choose a set of four different integers between 1 and...

In a certain lottery game, you choose a set of four different integers between 1 and 50, inclusive, and a fifth integer between 1 and 20, inclusive, which may be the same as one of the other four.

a) What is the probability you win the jackpot by matching all five numbers drawn?

b) What is the probability that you match three of the first four numbers, but not the fifth?

This is for discrete math

In: Statistics and Probability

1.         Please describe the five conflict handling modes as set forth in the Thomas-Kilman Conflict Mode...

1.         Please describe the five conflict handling modes as set forth in the Thomas-Kilman Conflict Mode Instrument. In doing so, please be sure to discuss the ramifications of underusing and overusing each.

2.         Please describe and distinguish between the following alternative/appropriate dispute resolution methodologies: mediation, fact-finding, arbitration

3.         Please describe and distinguish between the three models of mediation

In: Operations Management