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Short Term Financial Management

Assignment #2

Dickson Chan
050814060
Vicente Chan
500135196
Calvin Ho
500142257
Vivian Leung
050329895
Benjamin Mai
500133141
Shamim Majidi
052357969
Mohammed Abrar Mistry
032503658
bathroom Nguyen FIN601 Short Term Financial Management
500138084 Professor Keith E. MacInnes
Karen Tran
500145739Thursday November 27, 2008
administrator Summary

Bailey Distributing Company
Bailey Distributing Companys rising policy can brook a competitive suck in over its competitors. The effects of implementing the new policy are make up in last sales, accounts receivable, inventory, and two administrative and reside expense. Aside from the effects of the new policy, the companions overall value will increase because of the increase in net income, along with the quantity of customers. Therefore, we recommend Bailey dispersal Company to implement its new policy of 3/10, net 50.

new-fashioned & Fruity Foods
After running some figures, Fresh & Fruity Food can in fact dissolve its cash flow problem of sales on accredit with Alice Plummers suggested solution. First, if Fresh & Fruity offer a decennium percent discount, it can encourage customers to provide an earlier honorarium towards their orders.



Accounts receivables balance will therefore reduce to $103,364, which will free $106,322 of cash. Fresh & Fruity Foods can so partially take advantage of their suppliers discount by paying off their suppliers with the additional freed-up cash. As a result, the companys accounts payable will decrease to $74,312. To fully take advantage of the discounts the supplier is offering, Fresh & Fruity can also transpose the liability from the supplier with a bank loan of $47,763 with an interest of 8%. Therefore, Alice Plummers solution provides Fresh & Fruity an after-tax gain of $10,425 and an ending net income of $61,048.

PROBLEM 1: Bailey Distribution Company

a) Accounts receivable balance before and after the change in...If you want to go about a full essay, order it on our website: Orderessay



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