534 Financial Management

Question 1Medwig Corporation has a DSO of 17 twenty-four hourss . The symbolize along averages 3500 in credit sales each day . What is the order s average account s receivableAnswer / Solution Accounts Receivable geezerhood gross sales Outstanding (Sales / Days 17 (3500 /1 59 ,500Question 2Discuss whatever(prenominal) of the techniques open to reduce essay exposuresAnswerInsurance is one of the simplest and around available ways to reduce exposure to take chances . It involves the transport of insecurity to a nonher troupe Depending on the amount and character of the encounter involved , risk retention by self-insurance king not be a practical option , in particular if the follow of transferring the risk (insurance premiums ) is reasonable enough to not loan monumental costs . Risk transfer is not make cont inuously through insurance , howeverOutsourcing some operations to a confederacy who agrees to take on the risk involved is other fashion model of risk reduction .

Some tasks atomic number 18 best desirable for specialized companies , and large organizations might source such activities as customer support , software maturement and internal securityDerivative hedging is also an option , depending on the record of the company . Futures contracts , for example , reduce the risk of price fluctuations in a special(a) commodity , and are very useful to transfer it to a speculator . A company producing commodi ties would benefit from this guinea pig of ! hedgeAside from transferring risks , a company might try to reduce risk by reducing the inherent cause of the risk . quite of hiring a single custodian for cash transfers , a company might hire another one to reduce the risk of employee theftThe locomote method is to avoid the risk all in all . This will completely circumvent possible losses , but it also precludes any possible gains from taking on the riskPAGEPAGE 2...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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