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FINA 3313 Final Exam Questions with Correct
Answers | Updated (100% Correct Answers)
American Products is concerned about managing cash efficiently. On
the average, inventories have an age of 86 days, and accounts
receivable are collected in 56 days. Accounts payable are paid
approximately 33 days after they arise. The firm has annual sales of
about $32 million. COGS are $18 million and purchases are $14
million.
The cash conversion cyle is _____________ days. Answer: 109
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 33 = 109
APP = Average payment period = AP/COGS X 365
American Products is concerned about managing cash efficiently. On
the average, inventories have an age of 86 days, and accounts
receivable are collected in 56 days. Accounts payable are paid
approximately 33 days after they arise. The firm has annual sales of
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about $32 million. COGS are $18 million and purchases are $14
million. USE Purchases formula
The amount of resources need to support the firm's cash conversion
cycle is $_______________. (no $ sign in answer) Answer: 7,884,932
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 56 = 109
APP = Average payment period = AP/COGS X 365
Inventory = COGS X (AAI/365) = $18,000,000 X (86/365) =
$4,241,096
Accounts Receivable = REV X (ACP/365) = $32,000,000 X (56/365) =
$4,909,589
Accounts Payable = PURCHASES X (APP/365) = $14,000,000 X
(33/365) = $1,265,753
Resources Invested = NWC = INV + AR - AP = $4,241,096 +
$4,909,589 - $1,265,753
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a
fixed rate loan and the interest is paid at maturity what is the
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effective annual rate for this loan? (in percent terms but without %
sign) Answer: 10
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a
fixed rate discount loan what is the effective annual rate? (in percent
terms but without % sign) Answer: 11.1
Effective Annual Intertest Rate for a discount loan is
Interest/(Amount borrowed - Interest)
= $1000/($10,000-$1,000)
Mr. John Hall (UTA's VP of facilities) notes that the solar cells on top
of the parking garages were funded by a grant that required the
university to pay for 20% of the solar cells (total cost of the solar
cells was 2.25 million USD). The solar cells save about $72,000 per
year in electricity costs and have an expected life of 30 years.
Ignoring inflation, what is the IRR of the project from UTA's
perspective? Answer: 15.8%
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by
Xpress Widgets? Answer: 7.3
© 2025 All rights reserved
FINA 3313 Final Exam Questions with Correct
Answers | Updated (100% Correct Answers)
American Products is concerned about managing cash efficiently. On
the average, inventories have an age of 86 days, and accounts
receivable are collected in 56 days. Accounts payable are paid
approximately 33 days after they arise. The firm has annual sales of
about $32 million. COGS are $18 million and purchases are $14
million.
The cash conversion cyle is _____________ days. Answer: 109
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 33 = 109
APP = Average payment period = AP/COGS X 365
American Products is concerned about managing cash efficiently. On
the average, inventories have an age of 86 days, and accounts
receivable are collected in 56 days. Accounts payable are paid
approximately 33 days after they arise. The firm has annual sales of
© 2025 All rights reserved
,2
about $32 million. COGS are $18 million and purchases are $14
million. USE Purchases formula
The amount of resources need to support the firm's cash conversion
cycle is $_______________. (no $ sign in answer) Answer: 7,884,932
OC = AAI + ACP =86 +56 = 142
AAI= Average age of inventory = (INV/COGS) X 365
ACP = Average collection period = (AR/REV) X 365
CCC = OC - APP = 142 - 56 = 109
APP = Average payment period = AP/COGS X 365
Inventory = COGS X (AAI/365) = $18,000,000 X (86/365) =
$4,241,096
Accounts Receivable = REV X (ACP/365) = $32,000,000 X (56/365) =
$4,909,589
Accounts Payable = PURCHASES X (APP/365) = $14,000,000 X
(33/365) = $1,265,753
Resources Invested = NWC = INV + AR - AP = $4,241,096 +
$4,909,589 - $1,265,753
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a
fixed rate loan and the interest is paid at maturity what is the
© 2025 All rights reserved
, 3
effective annual rate for this loan? (in percent terms but without %
sign) Answer: 10
Mav, Inc. wants to borrow $10,000 @ 10% APR for 1 year. If this is a
fixed rate discount loan what is the effective annual rate? (in percent
terms but without % sign) Answer: 11.1
Effective Annual Intertest Rate for a discount loan is
Interest/(Amount borrowed - Interest)
= $1000/($10,000-$1,000)
Mr. John Hall (UTA's VP of facilities) notes that the solar cells on top
of the parking garages were funded by a grant that required the
university to pay for 20% of the solar cells (total cost of the solar
cells was 2.25 million USD). The solar cells save about $72,000 per
year in electricity costs and have an expected life of 30 years.
Ignoring inflation, what is the IRR of the project from UTA's
perspective? Answer: 15.8%
The credit terms for 2 suppliers are as follows;
Xpress Widgets, Inc. 1/10 net 60
Rapid Rabbits Comglomerated 2/10 net 90
What is the approximate cost of giving up the discount offered by
Xpress Widgets? Answer: 7.3
© 2025 All rights reserved
