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ms abcs present credit terms are 110 net 30 that they are planning to change to 210 net 30 the current average collection period is 20 days and
cash discount is given to buyers to bring them to make prompt payment the credit terms identify the percentage discount and the period throughout
ms abc has an existing sales of rs50 lakhs and permits a credit period of 30 days to its customers the firm cost of capital is 10 and the ratio
it refers to the length of time given to the buyer to pay for their purchases throughout this period no interest is charged on the excellent amount
the current sales of ms abc are rs100 lakhs through relaxing the credit standards the firm can produce additional sales of rs15 lakhs on that bad
this variable deals along with the granting of credit on one great all the customers are granted credit and conversely none of them are granted
each company must establish its own credit policy based on the ground condition and the environment wherein it is operating the major goal of the
in the documentary bills the seller faces a lot of risk as the risk of non-acceptance or non-payment of goods this poses a main risk for the seller
open accountcredit sales are usually on open account that implies which the seller ships the goods to the buyer and afterward sends the bill
terms of payment vary broadly in practice at one conclusion if the seller has financial resources she or he may extend liberal credit to the buyers
after going through this section you must be capable toknow the need for establishing sound credit policyidentify the different credit policy
in the earlier unit we have studied how firms determine their requirements for current assets and manage their holdings in cash and marketable
in this section we have discussed the motives for conducting cash balances in addition we have discussed cash deficit or surplus situation and how it
the significant functions of a treasury department are as given belowa setting up corporate financial goals financial strategies and aim treasury
a few of the main focus areas of treasury operations are as follows1 cash flow-receipts and disbursements accelerating the collection of cash
treasury management is explained as the corporate handling of all financial matters the production of external and internal funds for business the
by electronic fund transfer the collection float can be completely removed the other benefit of electronic fund transfer is instant updating of
lock box system in this type of system the customers are advised to mail their payments to a post office box hired through the firm for
when the customers of the company are spread over broad geographical areas then in place of a particular collection centre the company opens
collection float considers to the gap among the times payment is made through the customerdebtor and the time while funds are obtainable for use in
once the cash budget has been arranged and suitable net cash flows established the finance manager must ensure that there does not exists an
the subsequent short-term investment opportunities are obtainable to companies in india to invest their temporary cash excessa treasury bills
the requirement for working capital fluctuates according the level of inventory production debtors and creditors etc the working capital needs are
the significant objectives of short-term cash forecast are as given find out operating cash requirement anticipating short term financing
ms sunrise industries estimates its net cash requirement at rs 20 million for the subsequent year opportunity cost fund is 15 percent per annum of