Ask Question, Ask an Expert


Ask Corporate Finance Expert

Attempt all the problems. 


problem1) What is carrying cost and shortage cost? Which policy is recommended if shortage cost is relatively lower than carrying cost and vice versa? Describe the policies followed in maintaining working capital with suitable exs.

problem2) How do you evaluate a proposed credit policy? How does the value of a credit policy change in case the new policy earns a repeat customer? Describe with suitable exs.

problem3) What are the techniques used to accelerate collections in the area of cash management. Describe with a case study.

problem4) What are the various kinds of expansion and contraction policies used by firms? Describe with appropriate ex.


Pickles Ltd. produces the single product sold throughout the state of Tamil Nadu. Its profit analysis is given below:

Per Unit( Rs)
Selling Price                        40                       
Variable costs        36                           
Fixed cost               3       -39                       
Net profit per unit               1

Pickles Ltd. has the annual turnover of 4.8 million and an average collection period for debtors of one month. It has conducted a study on entering its neighbouring state Kerala and believed that this will produce an extra sale of 25%. But new business will require a 3 months credit period. Stocks and creditors will rise by Rs.4,00,000 and Rs. 2,00,000 respectively. Cost of financing any increase in working capital is 10 percent

The problem of whether profits increases as the result of expansion into Kerala markets very much rests on whether the existing Tamil Nadu customers also demand more favorable term.

Case problems:                   

problem1) What will be the profit increase in case only new customers take 3 months  credit.

problem2) What will be the profit if all customers take 3 months credit.

Corporate Finance, Finance

  • Category:- Corporate Finance
  • Reference No.:- M93401

Have any Question? 

Related Questions in Corporate Finance

Non depository institutionsnbsp compare the main sources

Non depository Institutions:  Compare the main sources and uses of funds for finance companies, insurance companies, and pension funds.

Part 1 introduction conclusion and references 3-4

Part 1: INTRODUCTION, CONCLUSION, AND REFERENCES 3-4 PAGES(BODY) You are a financial analyst for the CMC Corporation. This corporation predicts changes in the economy, such as interest rates, retail trends, and unemploym ...

Global financial market regulations assume that countries

Global Financial Market Regulations : Assume that countries A and B are of similar size, that they have similar economies, and that the government debt levels of both countries are within reasonable limits. Assume that t ...

Suppose that consumer confidence unexpectedly rises six

Suppose that consumer confidence unexpectedly rises six months before the central bank detects the change. Compared to your answer to Problem 1, what happens to inflation and output in that interval? How does monetary po ...

Hp vs dell financial performance1 evaluate other areas of

HP vs DELL financial performance 1. Evaluate other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations, etc. Make an overall conclusion about ...

The pugelovian central bank intervenes in the foreign

The Pugelovian central bank intervenes in the foreign exchange market by selling U.S.$10 billion to prevent the Pugelovian currency (the pnut) from depreciating. a. What impact does this have on the Pugelovian holdings o ...

In the world bank data examine bank loans as a percentage

In the World Bank data, examine bank loans as a percentage of GDP in the United States, Germany, and Japan. Is the level of bank loans relatively high or low in the United States? What might explain this fact?

Do some research on adjustable rate mortgages one source is

Do some research on adjustable rate mortgages. One source is Freddie Mac's Annual ARM Survey (the text Web site links to Freddie Mac's site, which contains the surveys). Since 2009, when ARMs were 3 percent of prime mort ...

Senator ostrich suggests that in order to end poverty all

Senator Ostrich suggests that "in order to end poverty, all we need to do is pay everyone making less than the poverty line the difference between what they are earning and the poverty line." Ostrich argues that, based o ...

Finance organization and long-term planning discussion

Finance Organization and Long-Term Planning Discussion Question Considering Genesis Energy's aggressive growth plan, Sensible Essentials suggested that its client should broaden the scope of financing beyond short-term l ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate