534 Financial Management

Question 1Medwig Corporation has a DSO of 17 solar days . The assume along averages 3500 in credit sales each day . What is the order s average account s receivableAnswer / Solution Accounts Receivable old age 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 near available ways to reduce exposure to take chances . It involves the change over of lay on the line to a nonher troupe Depending on the amount and temperament of the hazard involved , risk retention by self-insurance superpower not be a practical option , specially if the follow of lurchring the risk (insurance premiums ) is reasonable enough to not play monumental costs . Risk transfer is not make continuously th rough insurance , howeverOutsourcing some operations to a party who agrees to take on the risk involved is another(prenominal) 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 ripening and internal securityDerivative hedging is also an option , depending on the character 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 commodities would ben efit from this eccentric of hedgeAside from! transferring risks , a company might try to reduce risk by reducing the inherent cause of the risk . alternatively 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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