A corporation has $344 million in sales,$232 million in COGS, $53 million in inventory, $128 million in accounts receivables, and $93 million in accounts payable. The firm borrows at 8% compounded daily to finance its NOWC. How much will the firm have to pay in interest for the year due to the Cash Conversion Cycle? Hint: take the CoGS and calculate how much it grows over one cash conversion cycle (in days) with a daily interest rate that you calculate from APR. Answer in millions of dollars. Make sure you have 3 or 4 significant digits (ie. if the the answer is $6,789,012 million, your answer should be 6.789)

A corporation has $344 million in sales,$232 million in COGS, $53 million in inventory, $128 million in accounts receivables, and $93 million in accounts payable. The firm borrows at 8% compounded daily to finance its NOWC. How much will the firm have to pay in interest for the year due to the Cash Conversion Cycle? Hint: take the CoGS and calculate how much it grows over one cash conversion cycle (in days) with a daily interest rate that you calculate from APR. Answer in millions of dollars. Make sure you have 3 or 4 significant digits (ie. if the the answer is $6,789,012 million, your answer should be 6.789)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 10P

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