1. Darla’s Cosmetics has annual credit sales of $1,476,000 and an average collection period of 40 days in 2008. What is the company’s average accounts receivable balance? (Use a 360-day year.)
2. Suppose a country with a fixed exchange rate attempted to fix their rate at too strong a level. Analyze what effect this would have using the monetary model. What reasons may a country have to decide to do this?
3. A bond that has a face value of $1000 has a coupon rate of 12.5% per year (payable semi-annually) and has a remaining life of 8.5 years. What is the bond's current yield if the yield to maturity is 14%?