Refer to the Information Provided in Scenario 22

question 77

Multiple Choice

Refer to the information provided in Scenario 22.5 below to answer the question(s) that follow.
SCENARIO 22.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.

-Refer to Scenario 22.5. The total cost of telephone service for residents of Zoink in 2016 is ________ Bugabucks.

• A) 4,800
• B) 24,000
• C) 96,000
• D) 120,000

Acknowledge the influence of credit sales terms, including discounts and collection periods, on firm's credit management efficiency.

Identify the purpose and effects of different cash management strategies on a firm's net float.

Assess the impact of inventory management decisions on total inventory costs and how safety stocks influence these costs.

Understand the implications of firm's policy changes on sales, working capital, and the need for additional funds.

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Definitions:

Milli-

A prefix in the metric system denoting a factor of one thousandth (1/1000) of the unit it precedes.

Metric System

A system of measurements that uses the base function of 10.

Base Ten

A numeral system that is decimal and uses ten as its base for counting and calculations.

Teaspoon

A small spoon used typically for measuring or stirring liquids, equivalent to about 5 milliliters in volume.