eae cee a es, Drawer fo concep ls Reviero and Croke Thinking pretest aso ina commercial nas Had is paxoble immediately 4 ok doormat Heaine qamediahe Payment - be A Hime adtiofh 18 % aornmentian Aro} pani quaweanjees Hae jada Poywendos % ann sight drat! ef bankers aecerlarce jp whena aoramenoiod, drolt: dP promissory mote ig on TOU Mook eA dude accerlonee- iy when Pe buyers occeP yin Hoe ube Me euntomert 519M" yy Hee cornmmencia draft and promise jo POY O-Trode anodid iy WUasTxy gyrambed on oP EN acount Tne mnvoiee is Me anedit inne 51 Gosh of debts probolei YY of delat ond Ae conn dageourt « a. Credit wot No-eredit costs’ lest Saher- “The sum of Here ane He conryging costty. Chanaetert, delermines if a cantomert i willing 4o pay his ox her debts Capacity: delenmirer if 0 cuntorren if able Jo Pay dels onkos opereding aon Slow Gopital: Delenminen re entomer's Finondiah Kenerver in cone Problem oeeur wit operoding earn Slow Gondiiom: owrlomer's alorlidy fo wearer on economic. downtunn ond rohelben Such a Bownharn i likely. S penishrbility and catlokexal valve Gornumert demond Gah profiabitity aind Slemcharccti zadion Qredih Wisk “The. size of He account Compe ion cuntomen type£ Be pig Whely tegen fox conh only union He produc neath worlka-Th i) doen then fey migh) gion} longer eredid period? to enhee louyenn Br Londlonds have signi Freon¥y qneaker coliaterca oma ak collaSercall #5 no} mobile Ay Since Bis cuplomenn tannover inventory len freearernY Rao hove & Jorgen inventory Period and Maun wilt most Vively have a longer ered} pertiod on werl: B: Sinee Bo menohantize 15 perishable ome B 14 Rots Guoilh probably have a longen anedit perttock: A ~ Rugs are Sains slendendlized and Yes ore tromporntable. While conpeds ane curtom Ay cond anemod portteuerdy Jvormporttaloe- The Bawe main aadegenion of inventory are: Rous maRenial, Wore tn- PHEgHEN, and Gnighed good? From Pe Kumly ponrpective he demand Som binighed podr i5 indipendert feom re Jernomd fom Hre often typer of inventors: The dermomd Jon How mnageniak and Workk-inpregren is derived from, 5 needs for Pere typer oF inventory in onder. Jo ooviewe Re derine levels of Simished good « om Dependent on Me Growes . & i Syrtems Keduce Inventors omountb: Assuming no adveue feds on Salen Invertomy Jurnover will ineneoner Sinceameds will deehene telat ancl Se Reratting the DuPont! equation jan inereare in dolahamet furmovert, al eae being equaks hon o posikive effeet om Rok. F Covrmging Cod} Shoudd be eauat te orden easter imve He carnygin] costs ane loro qeladive to Hae onder costs, the Finn shouts ineneane ie Inventory level: lo Since the Price of components tov Recline quickly, Den Jeane have inventory which 14 pureonedond Hen declines quickly in vatue lelone iis sold: DE Mais happens, Me Inventory may be sold ak a loss. While frig approach 14 vahuable ibis AiFiedd fo implement For exomple Dell manufocharing Pleas WIN offen have. argon Sel onide Hud ane fon re Supplier « then pate\s onenecded i} 15 a wmadten. of Qoing acres the, Sloot to et eno parts: Tn Jack mast cormpedken Hranafoe-tarens one dyging Jo Ionplement Simijan inventory Syniow* AQAA MAD Daa manaBec esters we © (PD) There ane Yo dazn Umb| account 15 overdues Rembtonee = Soo ¥ 4135 = 467500 ethene 14 a [percent Rigtount offered witha le hay discount period « Remijanees(\— 0-01)% 467,500) 280.825 ed The implieit indenent 14 Me di Merence bekween Abe Jroo Hemithemee. como s, Tmpliad intenert-$la600- 460815 BOS he number of doy! anedil offered 15% Doys ened = 0-10 220 dagnD) Reseivoble }urmovert= 365/ Average eoilection period =%4C5/33 = NOG men Avenoge Heeeivabler: Soder/percivables period > $44,000:000/ 061 = $30739F3 5) Average eadleedion period = (0:65 %15 Sogn) 40-95 & 30 darn) > 99:26 Dorn Average Lalomee= (1300%419 00) x 4420-154 C12) 305 )$ S14 PIS 1B OF A) Deily sollen = 4 27.500/7 = 4$3928-59 Average accounts Keesivables $3923 -SFK2F = $1ObOF1 AS > a le ew alle see iki dae cee i fy em,S Trlerert rake = 0:0) (0-99 =0-010l = oly, jnfenon 15 fon: 30-10 +20 doyn EPR = (1 + periodic Hokey 1 345/20 _ =Crotery 2 O 2013, 2D0NO/ TD Dnlerort rae = 0-62/ 0-99 =0:204 = Q04r. Ean: ora prerire_y > O44 +44 Soy, & EARL oro fF! Se [O-OFG] 2 BGA TOLAR: (ror oOo, OLPFI ORL\ Receivable tunnover= 365/ Avexoge eollection period 85/36 = [01389 Hmey Prnuod enedi} solOr= Receivable himnovenx Avexage daily receivables = C0139 % 45e,300) < & 59109 p22, FP Toho cnedlil gater = (4.900% $495) 42415500 Averoge collection period: (o-4oxtod4(0- bo X40) +28 hagn Receivable tumnover= 345 /2¢ = 13-036 Hime Averoge reseivables = $2425500/13-036 =4 18606575 DE he fiom inereoner dhe cash discount mone people will pay soonest Hur lowering Be average. eoliertion period Dt Be Hep Seoliner the Heceivabler Fasnover Inereaner whieh Wil [eodfe a Zecreone inte averoge receiwhler-1E) Avenoge collection peniod= got 3p doyn Regeivables urmovent= 365/36 = LOSES dimen Pvenoge Kereivable= $9590.09 0 No-132¢9 =$ 91316024 © fo) The car outlays for He cxedit devision is We variable eos of We engine: Th Big iy @ one-time onder, te earh Inflow 15 He proved vale St dtes goher price of Hae emgine-imnos one mine Hie, KefauSd prokabi ly - So, We NPV Pex Ut ib: NPV ~$2400 000 +U\ 9.005 (H2LV Eve) J 1029 = $)%S265-31 Pen unit “The eoraporys shows fi) Hoe onder - To kind Hae break eer probobility of Refauth, x- NPV- —9 —$200000 + (I-A) (615 000) / 019 *% 20-0592 25.924 we should no} oeeert He orden if tte Selautk probability wor higher hom 5.92 Pence7 , DT Be eustomen will beeome a repeak euntomer the coh inflow ehonger Tie cosh intlow Vg now eneminwr the AefawA prodebi Py, mer the saher werneed te wre The golea price minwd puildanoler engine fo fae ewvremert vg_a penpelatty: se the NPV price wins the variable cost Be variable eost since wil) hae te jb one Period ALS onays Ais aon Inflow 14 m9! unde Sere anurphon 16 + Npy-— 424000 © py (\-0:005) (HL2HLe o}—240000 0) fo-027 = HG B\9GLF- SD Per unit Tre company, Shrouds fil) de onder The meskeoven ReSowd: probebi tis onder Rae anumpior? 15> NPV= 0 =-b2400 poor UK) BUTS EO 2400 © vo)|o-029 Ha 0.6907 ort GHOF% Th Are Read probeleilidy won higher Wen Je would not accep’ te onder ghert an in port to beeamne Hre- .07 7 Mis defaurs priobobitity 15 much Wi ewntomen mo became. & pepend eurtomer— 5 conumned Baki. pervion han paid Wis om her bills in re Part rey will Poy, Haein bills in Me Judune-This wmplien Had 14 Somemne Soewt defautk when ened ig frat grombert Hoon Beg oil bea aod eurtomert Janine the kare, cm Hae, POSSble goin from ye dekane urine oujweigh He possible loss” Seo gronting onedik ee frat Fre: 0) be dosh OF WHEOINg= FLO (roo) £4495 (ido “load Tb SEO Derefitos sai teding =H 720-495) INE Nee) = 3000 The benelid of switching 15 aprepeluity, 5° [ae NPV ob the deeision to switeh 15) NPVz- $8 18004 $ 9000/00 oS = HBS5CS-AL We cosh of Saber for onemonth before trex sre Linn wilt have te beet ened sodea whichis why ewok cost is mesdive ony nevenut Frcorn epeiveble will Grow over We one month exedid period and Wi Pen Kerman alle Wry porgrnents ond new soder of} setting one | | | : Lox ne month: Ri ] re. : ._——— W) coraeging costs = Upe02) 89) = 4.5958 ouder costs = (52) ($925 $37 700 the eapnomie onder quantity iS: Loo = [ter xP yree)”™ = ps 2) (1702) wrsse yh + 4LP9N9 The fronds potiey 1b nod Ophea Sinae the camreging caste ond He olbert asks omenok eqpod The company Should ierenne tte onder sire ama desxeone re number of ‘orden2 Comming Cosy =(350/2) eS) =42ngas Restocking costs = (5224995) = 420540 G09, = [wre recy!” > [sy nye 99591 oie 2 esas ondern per BYeort= 5 LUFSED/LER NS 255 Nuselpere of | Tre Baris poliog 35 not opal: since the | noes ane not equal The company shoud onder + aomneging eos} amd re. oredert Sesrenne the onder Si2e andimenewe He murber ofSythe Jolall coroying costs ome? Ganeeging Costs = (G2) KLE 5 Une. eabh conveging dosh per unit The rerbelking easts anes where CC 1 Resloakeing aag}o= FRCTLE) an enpand to each ofbert and Solving Or WE Seding there envod oo ee tol2y= FET) bere FXTICO ne gx [rerrieey = £O®rr... ee UD Gash How friom old polieg= (4104 -47) (ue) =41E4ESO oak Sow Som new Polieg = 0% 4B GYNS) =$ 200995 Prenerentah cook flow= 100995 —4\saee = FCS ag we WPV oS Hee detision Jo avenge. anedth policies 1S BeOs-3240) 44 VESIS [0-025 Npy= fear srt = ¥419055a as) Gosh Mow From old potier = ($295 -230) W105) 2 &q\925 Con Sow Srom new Polieg= (4 302-234) (25) + &FLS00 Tranementah coh How $F: 500 ~ FVE25 44075 NPV [ls DaSyU es) HLM 105) ($234 23H H234 125-05] A\446F5 | 0-0095)) = 4167030 LL Me) ers of the subseniption =44504 410( toe) = $6450 Sowingn tom not Sedting to bad ened Hisha = (4525) Woo) (0-04) = 41h loe Nek Savingn= 412600 - G50 = 45850 The tompony Shoda swosexibe to Hae anedti} ogeneg .ee ere 1) Cost lig > oS mew poliey [Pate (=v) 4 ey Pod He con How from soitehing, whiehis perpetuity 15 why iy. Banh Slow $xorn new polieg-[ ot Stade ; brea) ral Eaiksheeaiiy 19} tnd lhe breakeven Quomntity Sold For switels celeste i @ Sel We NPVzO and Solve Sor @! ere oe. ee bv =o> YU 104d B24e+ edd (ol-seaey] + Tel) (eiog-a7d-B240N($ ory “ay over Ox -4 6% I60— ANF 44 15225044 2440G!-4 739 47200 a £25939 24952 1S80 Gl seus NpV=0= fang S2t0) ~ (Gua Sere 3EH0)] + [ep tPDEEe) ho sayesves/ 0025 O=- 8 332G0- 75204 14 0009 —B 639 2000— F 3872-0 © 414000 P= $1425 680 p= s10d'€5ee qa INPv20-=— [Raza oS ($234 -230) C1105)-+4234 EH25 AL ost Pars s¢e230— (1b05) 4295-2309) /o-wo95 ° > [53259958 442d + ALSO}L4 NE4D05 PLT F10S26-32-FSL 05 De. 32 4 BULl 05 P= $3500 129: 64, Pie 4900-67 wo) Total suits Sold = a00k52) =Sb400 Onidlena pen Year = 3Gi00/500 = FBO To determine Ae dor when He net onder is placeck Phare Jo delenmine when Be lark onder wor Placed ince Pre Sule aHelved on Monday anch Were i$ a 3 doy delry from}re Hime fhe order Pleed umd) Hre Suils ann annive, the lao} onder won ploeedt on Fridoy, .cinee there ane Sdayn behvecn Be onder The neat orden wil be ploced on weeknerctag -") eS weve —4 14 25 0004 (}-0- SUAS ISeCD/ 1-019 £0-30(1 2S) L4y3000- W400) / 0-019 = 4LGuynyss-2e The company should fu We onder: (92>) ve ee eile (itive wave y/o" J NPV= L205 05244 re company Should Sh fitt He onder