1) Han Corp's sales last year were=$395,000, and its year-end receivables were= $52,500. Firm sells on terms which call for customers to pay thirty days after purchase, but some delay payment beyond Day 30. On average, how many days late do customers pay? Base your reply on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when computing the DSO. Suppose all sales to be on credit.
2) Bond X is the premium bond making semi-annual payments. Bond pays a 9% coupon, has YTM of 7 percent, and has 13 years to maturity. Bond Y is discount bond making semi-annual payments. This bond pays 7% coupon, has YTM of 9%, and also has 13 years to maturity.
Determine price of each bond today? If interest rates remain unaffected, what do you be expecting the price of these bonds to be 1 year from now? In 3 years? In 8 years? In twelve years? In thirteen years?