1. Due to a change in credit policy, LL Corp., expects to have 50 days sales outstanding. Before the change, the firm's annual sales was $50 million, variable cost of goods sold was $35 million, and days sales outstanding was 55 days. The firms credit manager estimates that this tighter credit policy will reduce sales by $5 million. What is the additional (or reduced) amount of investment matching the newly changed level of receivables?
(PLEASE PROVIDE WORK)
a.-$1.1438 million
b. -1.2123 million
c. -1.1644 million
d. +1.1438 million
e. +1.2123 millon
2. You earn $5,000 a month. After taxes, social security contributions, and living expenses you have $200 per month that you can and will save. What is the future value of $200 saved every month for 30 years if the annual rate is of return is 12%. We are looking for the value of your savings 30 years from the time you stated saving.