QUESTION 5 Current OC AAI+ACP 55 days+42 days 97 days Current CCC OC-APP 97 days-46 days Current OC AAI+ACP 50 days+ 65 days 115d Current CCC OC-APP 1 15 days-46 days Daily Financing $4800000÷365 $13150.68 Change in Financing Daily financing x change in OC X 0.09 $l315068×18×0.09 $21304.10 d. Aspen Jeans should accept the contract. The additional cost of financing($21 304.10) is less than the increase in net profits($35 000) QUESTION 6 Ledger balance= Starting balance - Payments+ Deposits Ledger balance=$250000-$20000-$60000+$45000 Ledger balance =$215 000 The payment float is just the outstand ing total of (uncashed) cheques written by the firm which equals $60 000 in this case The net float is:$60000-$45000=$15000August 2003 QUESTION 5 a. Current OC = AAI + ACP = 55 days + 42 days = 97 days Current CCC = OC - APP = 97 days - 46 days = 51 days b. Current OC = AAI + ACP = 50 days + 65 days = 115 days Current CCC = OC - APP = 115 days - 46 days = 69 days c. Daily Financing = $4 800 000  365 = $13 150.68 Change in Financing = Daily financing × change in OC × 0.09 = $13 150.68 × 18× 0.09 = $21 304.10 d. Aspen Jeans should accept the contract. The additional cost of financing ($21 304.10) is less than the increase in net profits ($35 000). QUESTION 6 Ledger balance = Starting balance – Payments + Deposits Ledger balance = $250 000 – $20 000 – $60 000 + $45 000 Ledger balance = $215 000 The payment float is just the outstanding total of (uncashed) cheques written by the firm, which equals $60 000 in this case. The net float is: $60 000 - $45 000 = $15 000