Eastern University Prides Itself on Providing Faculty and Staff a Competitive

question 6

Essay

Eastern University prides itself on providing faculty and staff a competitive compensation package. One aspect of this package is a faculty and staff child tuition benefit of $4,000 per child per year for up to four years to offset the cost of a college education. The faculty or staff member's child can attend any college or university, including Eastern University, and receive the tuition benefit. If a staff member has three children in college one year, the staff member receives a $12,000 tuition benefit. This money is not taxed to the individual staff or faculty member.
Eastern University pays the benefit directly to the university where the staff/faculty member's child is enrolled or if the student is attending Eastern, it reduces the amount of tuition owed by the faculty/staff member. The university then charges this payment to a benefits account. This benefits account is then allocated back to the various colleges and departments based on total salaries in the college or department.
Required:
Evaluate the pros and cons of the present university accounting for tuition benefits. What changes would you recommend making?

Compute the duration it takes for a company to pay its suppliers.

Determine the average collection period for accounts receivable.

Adjust and analyze the impact on the cash cycle due to operational changes.

Calculate the inventory period based on sales and cost of goods sold data.

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Definitions:

Figurehead

A person who holds a titular position of importance but lacks real power or authority.

Maypole

Traditionally, a pole decorated with streamers that are held by individuals as they dance around it during celebrations, often associated with May Day.

Hot Seat

A situation or exercise in which an individual is singled out for intensive questioning or scrutiny.

Orientation

The introduction and acclimatization process to new information, environments, roles, or systems.